What Is Covered?
With collision coverage, your insurer pays for the repair or replacement of your insured vehicle (including equipment, but not contents). Alternatively, your insurer may reimburse you the cash value of your vehicle in the condition it was in immediately before being damaged. You will be responsible for paying the deductible.
If the estimated repair cost plus the salvage value of the damaged vehicle exceeds the cash value of the vehicle before it was damaged, your insurer may decide to treat the vehicle as a write-off instead of paying to repair it. If your insurer confirms that your vehicle is a write-off, you will receive a cash settlement based on the fair market value of your vehicle before it was damaged.
Repairs and Betterment Versus Write-Off and Replacement
| Assessment | What Your Insurance Company Provides |
Repairs and betterment | Your insurer will pay to repair vehicle damage. - Your insurer will manage the relationship with the insurance company’s preferred repair shop.
- If your vehicle is made better than it was before the damage, you may have to contribute to the additional cost. For example, if a rusty door panel that is dented in a collision is replaced with one that is not rusty, you may be expected to contribute.
- You may choose to have additional work done on your auto that is not related to the collision damage. This is permissible, but the betterment work will be at your expense.
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Write-off and replacement | - The insurer will pay you the pre-collision value of your auto, minus your deductible, and keep the salvage.
- If your vehicle is less than 2 years old and your policy includes a limited waiver of depreciation clause, your insurer will reimburse you for the full value you paid for it. You can use these funds to purchase a replacement vehicle.
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Preferred Vehicle Repair Shops
If your vehicle is damaged but can be repaired and the repairs are covered by your policy, your insurer will likely suggest that the repairs be done in one of the insurance company's preferred shops. The preferred-shop program helps control claim costs because prices are established in a contractual arrangement between the shop and the insurer. The program also ensures that a shop's work meets high standards.
If you send your vehicle to a preferred shop, your insurer will deal directly with the shop and guarantee that the work is satisfactory.
Choosing Your Own Repair Shop
If you choose a shop that's not in your insurance company's preferred shop program, you will be responsible for managing the repair. Be aware that the insurer will not pay more than the price that its repairer quoted.
4 Tips for Selecting an Auto Mechanic
- Don't listen to advice from a tow truck operator who suddenly appears after a collision.
- Seek recommendations. Your insurer likely has a list of preferred body shops in your area. Also, ask friends and relatives.
- Get a written estimate that includes parts and labour before you authorize repairs.
- Ensure that the shop agrees, in writing, to contact you for approval before performing any work that exceeds a set dollar amount.