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?
