I'm considering buying a used car with hail damage but a clear
title. My current car insurance company indicated that it wouldn't
provide the full coverage insurance needed for the lender for this
vehicle. Do you know why this is? Are there companies that
will provide coverage that is suitable to a lender in this
Pre-existing damage is an issue for many car insurance
companies. These auto insurance providers don't want to
insure a vehicle with full coverage (the physical damage coverages
of collision and comprehensive that lenders require) if it is
already damaged because they believe it would be too easy for
someone to fraudulently place a claim.
While you may never try to make a claim for the hail damage that
was on the vehicle when you bought it, there are plenty of
unscrupulous motorists who would. To stop fraud before it
occurs, many insurers won't give car owners the option of buying
comprehensive and collision until a damaged vehicle is
So, if you want to stay with your current car insurance company,
ask your agent if it would be insurable with full coverage if you
had the hail damage fixed.
Another reason that some auto insurance providers won't allow
you to purchase full coverage for a car with pre-existing damage is
that if the vehicle were damaged it would be difficult to
differentiate the old damage from the new. This can be
especially true for
Your car insurance company wants to pay for damages that are
sustained to your vehicle only during the time you've paid for
coverage, not before.
While the car you're considering has a clear title, its true
value is certainly less than an undamaged car's. If the car is
totaled, its value would be difficult to calculate -- and because
the vehicle is worth less, it's more likely to be totaled than an
car without pre-existing damage.
Even with all these above factors in place, some car insurance
companies will insure your car. They have procedures in place to
work around the issues with pre-existing damage.
We work with companies such as Esurance, Infinity, Progressive
and Titan that will permit you to purchase physical damage
coverages on a vehicle with pre-existing damage. This would
allow you to satisfy your lender's car insurance requirements;
however, obviously the pre-existing damage wouldn't be
Even if you're damaged in the same area, the claim adjuster
would take into account the previous damage and deduct that from
the claim payment. For this reason, the insurance company
will want the pre-existing damage documented when the policy goes
In addition, while each company has its own rules most won't
cover more than $500 of pre-existing damage. Thus, if the
hail damage repair costs are in the thousands, then you would need
to see about having it repaired before getting this vehicle insured
with full coverage.