Zaneta Wood, Ed.S. has over 15 years of experience in research and technical writing bringing a keen understanding of data analysis and information synthesis to reach a wide variety of audiences. She studied adult education and instructional technology at Appalachian State University as well as technical and professional communication at East Carolina University. Zaneta has prepared technical p...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers Insurance CSR 4 Years

UPDATED: Jul 14, 2021

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Here's what you need to know...

  • Auto insurance is designed to pay for repairs that are needed after a sudden and unexpected loss. It has a wear and tear exclusion that says it won’t pay for repairs needed as a car deteriorates over time.
  • If your car is damaged in an accident, your own policy will pay if you carry collision coverage
  • In order for your policy to pay, you’ll need to be primarily at fault and must pay your own collision deductible
  • When a vehicle is damaged in a loss that doesn’t involve a collision, the owner must carry comprehensive coverage to pay for the repairs
  • Insurance only pays for the reasonable cost of repairs and for parts as described under the policy terms
  • If the total amount of damage exceeds the value of the vehicle or the total loss threshold, the vehicle will be written off

Car insurance is required by law, but the coverage that you’re mandated to carry doesn’t help pay for your own vehicle repairs. Instead, the basic coverage that’s required under state law is designed to pay for third-party repairs rather than your own. This liability coverage is meant to protect your assets and make it possible for you to pay for the damages that cause. Compare car insurance rates now by using our FREE tool above!

This fact leaves many wondering how they can protect themselves against the burden of paying for their own repair bills. Fortunately, there are different options forms of coverage that can be added to a standard auto policy that will pay for some or all of the repairs that your vehicle needs. If you’d like to learn how to build a fully comprehensive policy that protects both your assets and your vehicle, read on and learn how insurance works.

What is the wear and tear exclusion?

Before you assume that just any type of repairs are made under your auto policy, you need to understand what’s specifically excluded under the contract. If you’re in an accident and your car suffers major cosmetic and mechanical damage, the policy will pay as long as you have the appropriate coverage. If, however, you’re trying to file a claim for faded paint or mechanical failure that’s occurred over time, the policy won’t pay.

In auto insurance and other types of property insurance, there’s a ‘wear and tear’ exclusion.

This was written into the contract to ensure that the insurance policy isn’t used like a warranty that covers the ordinary deterioration that occurs during the useful life of the car. Instead, Personal Auto Policies are to be used to restore a vehicle to its pre-loss condition after a sudden, unexpected, and unintentional loss.

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If I get into an accident, will my policy pay for my repairs?

As previously mentioned, your policy won’t automatically pay to repair the covered auto if you don’t have the right coverage options. In order for your policy to pay, you’ll need the corresponding physical damage coverage. If you’re in an accident, this physical damage coverage is called collision insurance. Without your own collision insurance, your policy won’t directly pay for damages as a result of a collision with another vehicle.

When will collision coverage pay under your policy?

If your vehicle collides with another vehicle, it doesn’t automatically mean your collision coverage will pay. The company will do some investigating to determine how to allocate fault for the loss first. After they’ve assigned a percentage of fault to each drive, it’ll then be determine which policy will pay. If you’re 50% or more at fault, it’s your own policy that’ll pay.

How much will your collision coverage pay to repair your car?

It’s specifically written into the policy that collision coverage will only pay up to the vehicle’s ACV. ACV is an industry acronym used that stands for Actual Cash Value. This means that the company won’t pay more than the vehicle’s worth at the time of the loss, factoring in depreciation. It also says that you’re responsible for paying your collision deductible before the company will pay. In some cases, the deductible will just be subtracted from the settlement check.

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How’s a vehicle’s Actual Cash Value calculated?

Now that you understand what the limits are under collision coverage, you might be wondering how your car is valued. Some might assume that the company would just go based of Bluebook values, but that’s not always the case. There’s multiple methods a claims adjuster can use to initially value a car and then decide if the repairs fall under this value. Here’s some of the ways a claims adjuster might assign a vehicle value:

  • Checking the fair market value of the vehicle in a valuation guide
  • Checking the sales records of similar cars within the vicinity
  • Checking private party sales of similar cars in the area
  • Researching the price of similar cars that are currently listed for sale

Is there limits as to how much your company will pay for repairs?

Some repair shops cost more than others because they specialize in certain brands or have a great reputation for quality.

Just because the estimated cost of repairs is much lower than the ACV of the car doesn’t mean the insurer will approve paying for any invoice you send in.

Many companies have a limit on how much they’ll pay per hour for labor, regardless of the labor being performed.

What’s the benefit of going to a recommended repair shop?

Some companies will ask you to go to a partner shop so that they can negotiate a fair cost for repairs. If you go with the insurer’s auto shop, they will guarantee the timelines on repairs and you’ll have a guarantee on the work done. Another benefit is that it’s guaranteed that the entire bill, minus your deductible, will be covered. These shops often provide you with a replacement car onsite.

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What happens if you’re not at fault for the loss?

If you’re not at fault for the collision, it’s the other party’s insurance that’ll pay for your repairs. Unfortunately for you, if the other party’s insurer tries to deny responsibility, the entire process of collecting for the damages can be delayed.

Luckily, if you have collision insurance, your company will ‘front’ you the money to repair your car and will go after the other insurer for you in a process called subrogation. If it comes to this, you’ll still have to pay for your deductible.

What if my car’s damaged while it’s parked?

There’s more than one way that your car can be damaged. While collisions are very common, it’s possible that you could find your car vandalized or that hail or a falling tree could damage it. When this happens, it’s your comprehensive physical damage coverage that pays for the loss. Comprehensive pays for the following causes of damage:

Do the same rules apply to comprehensive claims?

Just like collision claims, you’ll have to pay the deductible that you carry for comprehensive before repairs will be covered. Fortunately, most comprehensive deductibles are lower than collision deductibles because the premiums are so much lower. It’s also important to know that the ACV of your car will be the same if its a collision claim or a comprehensive claim. With this being said, if you do file a claim for a comprehensive loss you don’t have to worry about your rates going up to restore your car.

All comprehensive claims are viewed as non-fault and non-chargeable losses.

Auto insurance claims can be complicated, but if you know what to expect you’ll know how to navigate through the process in the best way possible. Now that you understand when your carrier will pay for repairs and when they won’t, you can protect yourself by building the best policy. If you’re not happy with your current plan, it’s time to look for one that will give you peace of mind. Use an online quote tool, price coverage, and bind the best policy. Enter your zip code in our FREE tool below to start comparing car insurance rates now!