Should I keep the hail damage insurance payout for my car

Question

I'm not sure if this is the right place to ask this.

I'm in the US.

I just got hail damage on my 2014 Toyota Corolla. As far as I can tell, it's all cosmetic. No damage to the windows, but a lot of dents on the top side of the car and a few on the right doors.

I owe about 8k on the car which I can pay off comfortably. It's a 0% interest loan, so I haven't yet. The initial cost was 22k. My insurance gave me a check for 7k for the hail damage.

I'm planning to just keep the money. Should I repair it instead? The worker said that if I don't get the repairs, they won't give me a payout next time there is hail damage. Will I also get nothing if I total the car later? If I go to a shop that does the repairs for 4k, will they deduct 3k from my insurance payout next time there is damage? In light of the previous discussion, should I drop comprehensive coverage if I keep the money? It seems like I should keep it for theft and other issues, but will they ask for the receipt for the hail damage later, even if the claim is for theft?

Also, more hail is expected tomorrow and the next day. If I get hail damage then, do they give me a payout because I didn't have a reasonable amount of time to get the repairs done?

I plan to keep the car for another 8 years hopefully. 7k is a third of the starting value of the car. Sinking that into cosmetic repairs when I don't care at all about how my car looks seems like a poor decision to me.

Answer 1

Insurance payments cover your loss of value in what you have protected. If you have a car in perfect condition that gets hail damage, it has lost value, so you are entitled to a payout (assuming you have that coverage). A car with existing hail damage that gets hail damage has lost no value, because the condition of the car hasn't changed. This would apply in your case because such a large payout would indicate that the hail damage affects most of the car. If you were to get a small payout for a few dings, then a much larger storm caused much more severe damage then you could have a case for getting another payout without having had the original damage fixed.

A car with existing hail damage that gets totaled in an accident most definitely has lost value, so you are still entitled to a payout for that, again assuming you have the coverage.

If you find a place that can do the work for less than you payout you do not need to send the excess back to the insurance company, and it will not affect future payouts.

Hail damage seems to be one of the things where a lot of people just pocket the payout if it's not severe and they don't mind. Bumper damage is another one. The longer you intend to keep the car the more sense it makes to just keep the money.