Car insurance pays for repairs only if the damage is covered under your specific policy

Whether your insurance pays for a repair depends on what caused the damage and what type of coverage you have. Collision coverage pays for repairs after an accident with another vehicle or object. Comprehensive coverage pays for damage from theft, weather, animals, or vandalism. Liability coverage does not pay for your own repairs — it pays for damage you cause to someone else's vehicle or property. If you have only liability (the legal minimum in most states), your own repairs are your responsibility.

The other major factor is your deductible — the amount you pay out of pocket before insurance kicks in. If you have a $500 deductible and repairs cost $1,200, you pay $500 and insurance pays $700. If repairs cost $300, you pay the full $300 because it is below your deductible.

Key Takeaways

  • Collision coverage pays for accident damage; comprehensive covers theft, weather, and vandalism; liability does not cover your own repairs.
  • You pay your deductible first, then insurance covers the rest of the repair cost up to your vehicle's actual cash value.
  • Insurance will not pay for maintenance, wear and tear, or damage that happened before your policy started.
  • You can choose where to get repairs done, though using your insurer's preferred shop may lower your out-of-pocket cost.
  • If repairs cost more than your car's value, the insurer may declare it a total loss and pay you the cash value instead.

How collision and comprehensive coverage work together

Most people who finance or lease a car are required to carry both collision and comprehensive coverage. If you own your car outright, you can choose to carry only liability, but that means you pay for all your own repairs no matter what happens.

Collision covers accidents — hitting another car, hitting a pole, rolling over, or being hit while parked. Comprehensive covers everything else: a tree falls on your car, hail damages the roof, someone breaks in and steals the stereo, an animal runs into you, or your car is stolen. Both have separate deductibles, so you might pay $500 for a collision claim and $250 for a comprehensive claim on the same vehicle.

The insurance company will not pay more than your car's actual cash value — what the vehicle is worth on the used market right now, not what you paid for it or what you still owe. If your car is worth $8,000 and repairs cost $9,000, the insurer will declare it a total loss, pay you $8,000, and you keep the car (or they keep it to sell for parts).

What insurance will not cover

Insurance does not pay for routine maintenance like oil changes, tire replacements, or brake pads — even if you have comprehensive coverage. It also does not cover wear and tear, rust, or mechanical failure. If your transmission fails because it is old, that is your expense. If a tree falls on your car and damages the transmission, that is a comprehensive claim.

Insurance will not cover damage that happened before your policy started. If you buy a car with existing frame damage and then buy insurance, the insurer will not pay to fix the frame. They also will not cover damage you cause intentionally, damage from racing or stunt driving, or damage from using your car for commercial purposes (like rideshare or delivery) if your policy excludes that use.

If you cause an accident and have only liability coverage, your insurance pays for the other person's repairs and injuries, not yours. You pay for your own damage out of pocket.

The repair process and your choices

After an accident or damage, you report the claim to your insurance company. They assign an adjuster who inspects the vehicle and estimates repair costs. You do not have to use the shop your insurer recommends — you can take your car to any licensed repair facility. However, if you use one of their preferred or "network" shops, the insurer may have already negotiated lower rates, which can reduce your out-of-pocket deductible.

The repair shop will contact your insurer with an estimate. If the estimate is higher than what the adjuster calculated, there may be back-and-forth negotiation. Once approved, you take your car to the shop, pay your deductible, and the shop bills the insurance company for the rest. Some shops will waive or reduce your deductible if you use them, though this varies by location and insurer.

The repair process typically takes one to three weeks depending on parts availability and shop workload. If your car is not drivable, ask your insurer about rental car coverage — some policies include it, others do not, and it has its own limits and deductible.

Total loss and what happens next

If repair costs exceed 70 to 80 percent of your car's actual cash value (the exact threshold varies by state and insurer), the company will declare it a total loss. They pay you the cash value, minus your deductible. You then own a car that is not safe to drive.

In most states, you can choose to keep the vehicle and the insurer will reduce the payout by its salvage value — what they could sell it for as scrap or parts. If you keep it, you cannot register it as a regular vehicle in most places; it becomes a salvage title car. Alternatively, you can let the insurer keep it, take the full payout, and walk away.

If you still owe money on a loan or lease, the insurance payout goes to the lender first. If the payout is less than what you owe, you are responsible for the difference — this is called being "upside down" on the loan. Gap insurance, if you have it, covers this shortfall.

Deductibles and how they affect your costs

Your deductible is the trade-off between your monthly premium and what you pay when you file a claim. A $250 deductible means lower monthly payments but higher out-of-pocket costs when damage happens. A $1,000 deductible means higher monthly payments but lower costs per claim. The right choice depends on your emergency savings and how often you expect to file claims.

Some insurers offer accident forgiveness, which means your rates do not go up after your first accident. Some offer a disappearing deductible, where your deductible shrinks by $100 for every year you do not file a claim. These programs vary widely, so ask your insurer what options are available.

Frequently Asked Questions

Does insurance cover repairs if I caused the accident?

Yes, if you have collision coverage. You pay your deductible and collision covers the rest. If you have only liability, you pay for all your own repairs. Your rates will likely increase after filing a collision claim, especially if it was your fault.

What if the repair shop finds additional damage during the repair?

The shop will contact your insurer with a supplement estimate for the extra damage. The adjuster reviews it and approves or denies the additional work. You may have to pay another deductible if it is considered a separate claim, though many insurers waive this for supplements discovered during the original repair.

Can I choose any repair shop, or do I have to use the insurer's shop?

You can use any licensed repair facility. Your insurer cannot force you to use a specific shop. However, using a preferred shop may lower your deductible or out-of-pocket costs because the shop has negotiated rates with the insurer.

What happens if my car is worth less than the repair cost?

The insurer will declare it a total loss and pay you the actual cash value of the vehicle, minus your deductible. You can choose to keep the car (and receive a reduced payout) or let the insurer keep it and receive the full payout.

Does insurance cover repairs if I hit a deer or animal?

Yes, if you have comprehensive coverage. Hitting an animal is considered a comprehensive claim, not a collision claim, so you pay your comprehensive deductible. Comprehensive typically has a lower deductible than collision, so this may cost you less out of pocket.