If your vehicle has pre-existing damage, insurers know about it. This is especially if the damage is clear or when you’d reported it or claimed it.
Now, you’re probably wondering, “how do insurers determine pre-existing damage?”
In this post, you’ll learn what pre-existing damages are, what they entail and how insurers can figure them out. You’ll also learn whether you can buy insurance with pre-existing damage on your vehicle.
Prior Damage Definition
Pre-existing damages are previous damages on your car that you didn’t repair, or they can be normal wear and tear on your car.
The determination of prior damage can occur on two occasions:
- When you’re buying an insurance policy.
- When you’re filing an insurance claim after an accident.
If you’re buying an insurance policy, pre-existing damage on a car refers to any damages your car already had before the insurer allows you to buy a policy.
If you’re filing a claim, pre-existing damage refers to any damage before the accident.
How Do Car Insurance Companies Determine Pre Existing Damage
If you’ve ever had your car damaged and reported it, insurers know about it. All insurers know about the damage. But even if you had not reported your car damage to your insurer, they’ll learn about any pre-existing damage.
How do they know this?
There are different ways:
- Insurance databases
- Insurance adjuster
- Collision repair expert
We’re in the age of information, and databases and car insurers have not been left out. Insurers routinely track and share their policyholders’ information through two databases:
- The Comprehensive Loss Underwriting Exchange (CLUE), and,
- Automated Property Loss Underwriting System (A-PLUS).
Insurance companies that subscribe to these databases can learn about all the claims you’ve filed and damages you’re reported going back several years. They will also know the dates and causes of damage, the other driver’s submissions, claim check amounts, and more.
These databases apply to both car insurance, renters insurance, and homeowners insurance.
In addition to the claims you received from your insurer, these databases also contain reports on:
- Your vehicle information, including age and condition
- Claims you reported but didn’t result in a settlement
- Denied claims
- Claims on the vehicle made by prior policyholder if the car was pre-owned
- Other damages reported
Damage inspection can be performed during policy purchase or after a car accident. In both cases, the individual performing the inspection may uncover pre-existing damage.
If you didn’t report the damage, your insurer might still know about pre-existing damage through damage inspection.
Who conducts insurance damage inspection?
Answer: Insurance adjusters.
Can insurance adjusters tell how old the damage is?
Yes, insurance adjusters can tell the age of vehicle damages.
If you’re filing an insurance claim, the insurance adjuster will schedule a date and time to assess the damage that your car has sustained.
While at their job, the adjuster will check your car with a fine-teeth comb. They will also take as many pictures as possible from different angles. They check each damage to make sure it’s fresh from the particular accident or old damage.
If the car had any pre-existing damage, the insurance adjuster would note it down. It is their job to locate damages other than the damage caused by the accident you’re claiming against.
Collision Repair Expert
Typically, a collision repair expert can examine car damage and know the age of the dents and scratches. They can differentiate between fresh car damages and old ones.
Because they’re trained experts, their opinion can be valid proof if the car has (or doesn’t have) pre-existing damage.
What If The Damage Is On The Same Spot As Pre Existing Damage?
If your car sustains damage after an accident, and the new damage is located in the same area as pre-existing damages, the insurer will still know.
They can still check the database or use the insurance adjuster or collision repair expert to assess the damage and understand its condition.
If this happens, the insurer may deem the car not damaged or in no worse condition than it was prior to the accident.
If you think the new damage is worse than any pre-existing scratches or dents, you can negotiate with the sent insurance adjuster and make them know.
Does Insurance Cover Pre-Existing Damage?
Many insurance policies don’t provide coverage for pre-existing damages. Sometimes insurers can use prior damage to decline your policy offer or a future claim. Why?
First, the insurer cannot provide coverage for damage that occurred before you had a policy contract with them. They do not know the particulars of the damage, why it was denied (if the claim was denied), or why you never reported it.
Second, it’s costly for insurers to cover any type of damage they find on your car without accurate facts.
In order for car insurance providers to cover pre-existing damages, the damage needs to have occurred only after the policy contract start date.
Can I Buy Insurance With Pre-Existing Damage?
This depends on the insurance company, the type of insurance, and the state.
Your car’s condition doesn’t matter when buying liability insurance. Insurers will give you a liability policy even with pre-existing damages because it’s a requirement in most states. But it only provides coverage for damages you cause to another vehicle and not your car.
However, if you want full coverage, you may need to undertake an inspection to be covered. Why?
Generally, insurers don’t like to insure vehicles with pre-existing damage. These damages can make the company liable for new or future damages on the same spot.
If insurers allow you to buy a policy with pre-existing damage, you need to provide them with information on the vehicle, including any damages. Also, expect your premium rates to be higher than normal insurance coverage.
Some states require that a vehicle passes a physical inspection before you can purchase a collision and comprehensive coverage. States like New York, New Jersey, Massachusetts, Rhode Island, and Florida require that you provide confirmation of a vehicle’s physical condition for structural integrity.
These are called CARCO states.
They do this before purchasing a policy to help reduce fraudulent claims payouts. This also makes the work of insurers easy when conducting background checks of vehicles to know their prior situations, accidents and claims.
When Is An Inspection Required For Car Insurance?
During these inspections, they’ll take photographs and share them with insurance providers. The car inspection will check different factors such as:
- The vehicle’s general physical appearance
- Total vehicle mileage
- Overall vehicle physical condition
- The vehicle’s equipped features, accessories, and after-market parts
- If there are any damages present on the vehicle
If you don’t reside in any of these CARCO-required states, minimal car damage may not deter you from purchasing insurance. However, the provider will still learn about your vehicle’s damage through the methods detailed earlier.
Pre-existing damage is a deterrence to getting insurance because insurers fear costs. You may need to inform your insurer about the pre-existing damage to enable you to negotiate your premium rates. Otherwise, insurance companies have different ways to determine pre-existing damage, and if they find one on your car, your premiums may go higher.