How to insure a car with prior damage

The good news is that insuring a car with hail damage in Melbourne or other types of pre-existing damage is possible. However, you might face limitations on the type of coverage available. This guide explains what you need to know about getting car damage insurance, how to navigate your options, and when it might be worth considering panel repairs first.

Confused about your insurance options? At Sheen, we work closely with customers to simplify the claims process and help you get back on the road faster.

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Understanding your car insurance options 

When you’re insuring a car with existing hail damage or other types of prior damage, insurers are understandably cautious. From their perspective, it’s difficult to distinguish between old damage and new claims that might arise after an accident. This risk of potential fraud makes them hesitant to provide comprehensive coverage.

In most cases, you’ll still be able to access third-party property damage cover as long as your car is roadworthy and registered. This means you’re covered if you cause damage to another person’s vehicle or property, even if your own car is already damaged.

However, obtaining comprehensive car insurance for a vehicle with pre-existing damage can be trickier. Some insurers may refuse to offer physical damage coverage altogether, while others may apply exclusions or increased excess for certain types of damage.

Key tip: Always disclose pre-existing damage upfront. Trying to hide it could result in your policy being voided or claims being denied later on.

If the damage is cosmetic (like light scratches or dents), insurance companies may be willing to offer physical damage cover, provided they clearly document the current state of your car before the policy starts. This helps them distinguish between old and new damage if you make a claim.

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What type of car insurance covers hail damage?

You might be asking, what type of car insurance covers hail damage? In Australia, hail damage is usually covered under comprehensive car insurance policies. However, if your car already has hail damage when you apply, that specific damage won’t be covered until it’s repaired.

If you're shopping for car damage insurance in Melbourne and your car already has hail dents, some insurers may decline coverage or only cover future unrelated damage. It's important to check the Product Disclosure Statement (PDS) carefully to understand any exclusions or limits.

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Should you repair the damage first?

One of the easiest ways to improve your insurance options is to repair any existing damage, including hail damage, before applying for coverage. This will not only make your car more insurable but may also increase its market value.

At Sheen Panel Service, we provide high-quality smash repairs and panel beating services at locations across Victoria. Our repairs meet insurance-approved standards, making it easier to secure comprehensive cover afterwards.

We also offer towing services to get your car to one of our workshops safely, and accident replacement vehicles to keep you moving while repairs are underway.

Bonus tip: By repairing the damage first, you may qualify for a lower excess and broader coverage under your insurance policy.

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Things to consider before insuring a damaged car

Before applying for car insurance, keep these key points in mind:

• Check if the damage is superficial or structural. Structural damage may affect your car’s safety and insurability.
  
• Consider getting an insurance-approved repair quote to understand repair costs versus insurance savings.
  
• Review your Certificate of Insurance and PDS to confirm what’s covered and excluded.
  
• Be aware that even with insurance, pre-existing damage won’t be included in any claims until repaired.

If you’re buying a car with existing damage, you might negotiate a discount on the purchase price to offset repair costs. Then, you can decide whether to repair before insuring or insure with coverage exclusions.

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FAQs about insuring a car with prior damage

Does prior accident damage affect my insurance premium?

Yes, prior accident damage can affect your insurance premium depending on its severity and whether it’s been repaired. Insurers may view a previously damaged car as higher risk, which could lead to higher premiums or policy exclusions. Providing evidence of professional repairs from an insurance-approved panel beater can help minimise this impact.

Can I get insurance if my car has structural damage?

Insuring a car with structural damage is more challenging, as insurers may deem the vehicle unsafe or unroadworthy. According to Transport Victoria, Most insurers will require a safety inspection or certification before offering any coverage.

Will my car’s pre-existing damage lower its insured value?

Yes, pre-existing damage is factored into your car’s market or agreed value by insurers. This means the payout in the event of a total loss claim may be reduced to reflect the damaged condition. Getting the damage professionally repaired can help restore your car’s insurable value.

Can I insure a car with rust or corrosion?

Insuring a car with rust is possible, but insurers may limit coverage or exclude claims related to rust-affected areas. If the rust compromises the vehicle’s structure or safety, it may need repairs before the car qualifies for insurance. Always disclose the extent of rust to avoid claim issues later.

Do I need a vehicle inspection to insure a damaged car?

Some insurers may require a pre-insurance inspection or photos to document the car’s existing damage before issuing a policy. This helps them distinguish between old and new damage if you make a claim. The inspection may be done at an approved repairer or through a digital submission process.

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How Sheen can help

At Sheen, we’ve helped countless Melbourne drivers navigate the complexities of insuring a car with hail damage or pre-existing damage. Our team can:

• Assess your car and provide an insurance-approved repair quote
• Assist with the insurance claims process
• Perform high-quality panel beating and smash repairs
• Offer towing to one of our workshops
• Provide accident replacement vehicles to keep you on the road

With multiple locations across Victoria, we’re here to make the process as seamless as possible. We work closely with insurers to ensure your repairs meet their standards, so you can confidently apply for comprehensive insurance post-repair.

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