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Why I Took A Cash Settlement For The Hail Damage Claim On My Vehicle

The weather in southern Alberta has been brutal this summer. When a huge storm rolled through Lethbridge on the evening of July 6th, we watched in horror as golf ball sized hail stones pummelled our house and vehicle.

We did a quick survey of the damage; a few pieces of siding blew off the house, four or five more were punctured by the hail, and our 2007 Hyundai Tucson sported dozens of dents to the roof, hood and side panel.

Related: Let The Flood Waters Stop!

We’re still waiting for an estimate on our house to see if we’ll need to make an insurance claim. In the meantime I was able to take our vehicle to get assessed last week. The result: an estimated $7,200 in damages.

Hail Damage: Take The Cash Settlement or Fix it?

I looked up the value of our vehicle on Canadian Black Book and it’s worth approximately $8,800. To the insurance company, that means the car is repairable and won’t be a complete write-off.

So I had a decision to make. Do I take a cash settlement of $7,200, minus the deductible, or do I pay the deductible and get the vehicle fixed?

I decided to take the cash and here’s why:

High Deductible

We bought a new vehicle last year to use as our main family car and for my wife to haul around our busy kids during the day. That meant the Tucson became our second vehicle, which I drive to and from work.

Since I only drive around 20 kilometres a day (hooray for short commutes!), I decided to increase the deductible from $250 to $1,000 to save money on our car insurance.

The high deductible meant that I’d need to hand over $1,000 cash to make the insurance claim and have the hail damage repaired.

Not planning to Sell

The hail damage will certainly affect the resale value of the car, but our original plan was to use the Tucson as our second vehicle for the next eight to 10 years.

The car only has 83,000 kilometres on it and we own it outright. Whether we took the cash or fixed the car, we’d still keep it and drive it into the ground.

Fix it later (and cheaper)

The $7,200 estimate was for completely replacing the roof, hood and side panel. For a quarter the price (or less) I’ll try a paintless dent repair shop (PDR) to remove the minor dents and dings.

Related: How I Saved Over $300 On House Insurance

Unfortunately the vehicle does have at least two major dents that damaged the paint, and so PDR won’t be suitable to fix them.

After I get the cash (and once hail storm season ends) I’ll earmark $1,500 for repairs and go around town to get a couple of free estimates.

Head Start on a New Vehicle

A $6,200 cheque gives is a nice head start on our next vehicle – even if that’s years down the road. At the very least we’ll keep this money in a high interest savings account and use it to buy new tires and take care of repairs that may come up in the future.

Downside

The downside to taking the cash settlement and not fixing the car completely is that I’ll be driving around with a bunch of dents, and those dents could eventually lead to some rusting issues.

The car could go to hell fairly quickly if I don’t look after it.

There’s also a chance that getting the car fixed at cheaper repair shop might not work out so well – they could do a lousy job fixing the dents or it’ll wind up costing a lot more than $1,500 to get it done right.

Finally, by taking the cash settlement my insurance company put a 13H (deletion of hail) on the vehicle, so it won’t be covered if it gets damaged again by hail.

Final thoughts

I’ll be honest, it sort of feels like I’ve won the hail lotto. The more I drive the car around, the less I notice the dents.

Part of me thinks the responsible thing would have been to get the car fixed through insurance. The other part thinks $6,200 is a lot of money to turn down and that I’d be further ahead by getting the car fixed for cheaper and putting the rest away for a rainy day. Apparently that part of me was more convincing.

Or I could just blow the whole amount on a trip to Disneyland – YOLO, right?

Have you ever made an insurance claim for hail damage? Did I make a smart choice by taking the cash settlement for hail damage?

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38 Comments

  1. Jane Savers @ Solving The Money Puzzle on July 22, 2013 at 4:48 am

    I would get a dent popping company to do the best they could then watch for rust.

    My uncle painted his own truck with a roller and a big can of Tremclad for over a dozen years. It looked just fine.

    I have a small stash of cash started for my next car.

    • Echo on July 22, 2013 at 11:28 am

      @Jane – Rusting is my biggest concern, especially on the two bigger dents. Something to keep an eye on.

  2. Sandi Martin on July 22, 2013 at 5:45 am

    That’s usually the part of me that wins, too!

    • Echo on July 22, 2013 at 11:31 am

      @Sandi – hard to ignore!

  3. Gary on July 22, 2013 at 7:24 am

    good choice robb. i ‘m sure your vehicle is still worth $5.000. plus even with the dents. in any case; it will still be a conversation piece.

    • Echo on July 22, 2013 at 11:33 am

      @Gary – Yeah, I’m not too concerned with the value of the car. I just don’t want this to be the start of a downward spiral where it ends up looking like a rust bucket.

  4. David writer on July 22, 2013 at 8:00 am

    I have no pride. I would drive around with the dents, keep an eye for rust and deal with it as best I can and drive the vehicle into the ground for the next decade.

    • Echo on July 22, 2013 at 11:34 am

      @David – That’s the plan!

  5. Brian @ Luke1428 on July 22, 2013 at 8:21 am

    I got a cash settlement once from an insurance company when I was hit from behind by another vehicle. The damage to my bumper was minimal and I was still able to drive the truck around after that. After awhile, I didn’t even notice (or remember) the damage was there. Sold the truck years later, never having repaired the bumper.

    • Echo on July 22, 2013 at 11:39 am

      @Brian – Interesting. It’s true though, you really need to look close to see the dents and dings. Not like some care I’ve seen with duct-taped windows and missing side paneling 🙂

  6. Dan on July 22, 2013 at 8:40 am

    Rob, the same thing happened to our vehicle a couple years ago but we paid the $500 deductible to get it repaired. I simply cannot stand looking at a badly damaged vehicle every single day. The insurance company used a PDR shop and the damages were about $5k. We got quotes from other shops and they were actually more. If they would have been cheaper we would have done the same as you. I still can’t believe how much money those dent places charge!

    • Echo on July 22, 2013 at 11:43 am

      @Dan – That’s very interesting, thanks for sharing. Maybe I’ll wait until the fervor dies down and hopefully the rates will fall as well. I imagine all the PDR shops are jam packed with repair jobs from the hail damage.

      The deductible played a big factor in this decision. If it were only $250 I might have got it fixed.

      • EW on October 7, 2019 at 7:46 pm

        After the 2 hail storms in August in Stony Plain/Spruce Grove, vehicle estimate came in. We decided to contact the insurance company and were informed, we either get it fixed or forget about the cash settlement. There was no such thing as a cash settlement amount. When I mentioned it, they said ,”No! We will not send you any money in lieu of the repair.!” So now I’m wondering, what’s the law?

  7. Jim on July 22, 2013 at 10:06 am

    Yes, you certainly did make the right choice. In my experience, insurance companies and the repair companies they work with are all in cahoots to rip off their customers. I had a repair done after I was rear ended and they charged the other guys insurance $4,200 for essentially cosmetic work on my car. I know this because they mistakenly left the work sheets in my car when I went to pick it up. They were in a real panic when they called me to see if I had the papers 🙂

    • Echo on July 22, 2013 at 11:44 am

      @Jim – Haha, oops!

      That’s an interesting theory, although I can’t see how a larger payout benefits the insurance company.

  8. Lynne on July 22, 2013 at 10:31 am

    Get yourself a toilet plunger or a smaller sink plunger and see what you can fix yourself!

    I’d take the money, the car is great for the purpose it is used for.

  9. Justin on July 22, 2013 at 11:07 am

    Yeah I’d take the money too. You could always try some dry ice on the dents!

  10. Bet Crooks on July 22, 2013 at 11:14 am

    I think I’d take some of the money and build a carport–but I guess knowing the winds in Lethbridge that wouldn’t work: it would just blow away. I hope you have a garage covering the “new” car?

    • Echo on July 22, 2013 at 11:56 am

      @Bet – We have a double garage and the new car was safely tucked away there. Unfortunately I couldn’t get the Tucson in the garage because we had some other things in the way. We’ve removed those other things now 🙂

  11. Echo on July 22, 2013 at 11:55 am

    @Lynne and @Justin – Great ideas! I just watched a video on the dry ice technique and it didn’t work 🙁

  12. My Own Advisor on July 22, 2013 at 5:14 pm

    Good call Robb.

  13. Erin on July 22, 2013 at 6:48 pm

    About the time your Tucson is ready to be driven into the ground your kids will have their learners licenses and they will finish the job for you 🙂

    • Echo on July 22, 2013 at 8:29 pm

      @Erin – can’t wait!

  14. Wendy on July 25, 2013 at 9:09 am

    In the States, a hail damage claim like that on your vehicle could possibly cause the insurance company to refuse to write full coverage on the car, not simply deny any further hail claims. Another thing that happens here with claims like that – if you have further claims down the road for body damage (not hail) and they know the hail repair was not done or only partially done, they will discount that future repair bill. In other words, a certain percentage (25%, 50% or more) will be deducted from that future repair for the hail that was never fixed. They will not pay to completely fix future collision damage when the hail dent(s) is in the same body panel, etc.

    Also, in the States, once the insurance company writes that estimate and finalizes that claim, all of the info goes into a computer system that any repair shop can access. So … if you take the car in for an estimate on the repair, the shop is going to be able to find out with a few mouse clicks how much you were paid on the claim. They will most definitely use that info when writing a repair estimate. It won’t matter if you tell them the check was less, or that you can’t remember how much you were paid – the info is there for the taking.

    A good PDR tech can do amazing work! Hope you find a good one! ☺

  15. Pat on July 30, 2015 at 1:57 pm

    Thanks everyone for all the info! My van is likely to be written off this year from our most recent hail storm but I want to keep it as it’s just cosmetic and the van still runs fine. Good to know about the lack of hail coverage if I take the cash though.

  16. James Dixon on August 10, 2015 at 11:42 am

    Does anyone know if TD Meloche Monex will allow you to keep a car after a hail claima and put the 13H disclaimer? I’ve read on some websites that TDMM will not only do the 13H and will simply not allow the car to be insured for any type of comprehensive claim at all.

    I’m not sure if I would get it fixed or take the cash and live with the damage, but if I kept it, I would want to be able to have it insured for future accidents.

  17. Preston on August 20, 2015 at 12:18 pm

    Who do you insure with? I wanted to get a cash payout for my hail damage as it was ~$5800 but TD will only payout for less than $5k. Meaning my only option is to fix my car. As it’s nearing 8 years old, I’m planning on driving it into the ground anyways, and $5k would be nice.

    • Echo on August 20, 2015 at 4:02 pm

      Hi Preston, my insurance was through Wawanesa. It sounds like TD has some different interpretations when it comes to hail damage and payouts.

      • Preston on August 20, 2015 at 11:04 pm

        I’ll check them out, thanks!

  18. Stephen on September 2, 2015 at 3:07 pm

    I’m going through the same issue. I’m more interested in the settlement issue though. My insurance company is trying to reduce my cash settlement by 20% of the repair estimate simply because I want the cash and not repair the vehicle. It doesn’t seem right to me.
    I also had another estimate done that was over 20% higher than my insurance companies estimate.
    I’d like to get some more information on what’s fair and reasonable in these circumstances but can’t find anything. Can you recommend and resources?

  19. Nadine on October 9, 2015 at 11:25 am

    I am struggling with the same question…to take the cash or get the car fixed. There is significant damage $ wise, however, it does not show all that much. I’d fix it if it looked really bad because it would bother me to drive it.
    Has anyone heard anything about the insurance company dropping the client like a hot potatoe after the pay out? I heard a rumour. This would really suck since I have been paying my premiums to the Wawanessa almost without incident for the past 30 years. I’m not sure if I’d get a definite answer from my agent as I’m sure they don’t have to check with me before they cancel my policy. IF that happens, I understand, it is hard to find another insurance company to take it on…at a reasonable rate. Anyone??

  20. Cheryl on December 11, 2015 at 11:05 am

    I have very limited visual damage to my 2007 Tuscon from this August’s Calgary Hailstorm. I took it to the shop that “The Personal” told me to, and they came back with an estimate that effectively wrote the vehicle off. I found that amazing considering it took my three weeks to notice even the little “dimples” on the hood and when I look at the roof – I see nothing.
    The offer was $8000, and they take the car. I have no intention of letting them have the car. It is perfect shape otherwise, and this is simply cosmetic (and not even noticeable to people until I point it out).

    Today I was informed again that they “are coming” to take the vehicle…. I have my words to respond – but I thought I would reach out here first 🙂
    Any advice or legal guidance would be appreciated.

    Thanks.

  21. MJ on January 29, 2016 at 1:02 am

    I have got hail damage in August on my RAV4 2015. The insurance says they will give me 8k out of 12k (70% of estimate – deductible amount) as the cash settlement. and also if I get the cash settlement I won’t be able to have full coverage for my car anymore.
    I was wondering :
    1-should I fix my car or get the money? the damage is minor dents and hard to see.
    2-in general how is the settlement calculation? where this 30% reduce comes? Can I negotiate for it?

    Appreciate your help:)

  22. Zara on November 14, 2016 at 3:43 pm

    I have a claim as wel for 8173. but i do have my car financed, so if i do not repair it, the cheque will directly go the Car financing company?
    i am useing the personnel insurance company.
    any advice?

  23. D Baker on March 24, 2017 at 3:20 pm

    I bought a travel trailer cash so had no loan on it and it was a full write off in 2010. I kept the trailer and outside of cosmetic issues was completely mechanically sounds and weatherproof, etc. I ran it for another 2 yrs and then sold it to folks who used it on a lake lot. Taking the cash settlement was a wise choice that gave me a huge down payment on my new camper. Would repeat the same decision given the same circumstances.

    So after the years how’s the car holding up?

  24. Grace on May 13, 2017 at 7:08 pm

    My MAZDA 2015 SUV got 8-9 small (quarter size) hail damages on the roof and 4-5 on the hood. I have an appointment with the adjuster next week. I wonder if I should get it fixed or take the cash offer. My car has finance. So the check would be issued to me and the car loan company. The car has only 24,000 miles on it. The deductible is $250. Should I take the cash or should I get it fixed?

    • maria on May 24, 2017 at 3:21 pm

      I think, if you have a lien holder on your car, and the check is written out to the both of you, you HAVE to get it fixed because you do not own the car outright. I could be wrong. I just came from a hail inspection on my car and since i own it outright, they cut me a check right then and there. if anyone is looking for a great insurance company, GEICO is the place to go…i have been with them for over 23 years and have no intentions in leaving. My car is an older 2003 pontiac vibe and besides the hail damage (cosmetic), it runs great. I don’t think it would behoove me to take my car and get the dents repaired. However, like others in this thread from years ago, I will have a little stash to do some maintenance on my car and drive it until it won’t go anymore, giving that it has over a quarter of a million miles on it. If it was my new car, then i know i would HAVE to get it fixed since i do not own it outright. hope this helps!

  25. McKay on July 13, 2019 at 10:00 am

    I’m late to the party but this article is evergreen.

    We got hail damage 2 years in a row and it’s paid our car off. We renamed him “Lumpy” and have an extra $260 in our pockets every month now. Brilliant. Geico and Capital One for the win.

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