1. 75 POINTS
    Charles Newsome
    I am not a representative of State Farm as I am an independent agent.

    However, with that being said, State Farm can OFFER the ability to cover hail damage. Every insurance company that can protect your personal auto is able to provide coverage for hail damage.

    You are looking for a coverage called “Other-than-collision (OTC)” or sometimes called “comprehensive” coverage. This coverage is often called “all-risk” (a misnomer) or “open-peril” coverage. What the heck does that mean? It means that comprehensive covers EVERYTHING to your auto UNLESS it says it will not cover it. This is actually very robust as a coverage because it’s impossible to list everything that can happen to a car for exclusions, so you can have coverage for the random things that happen to your car.

    If you look at your policy for OTC, nowhere does it mention that it will exclude (not cover) hail damage. This is good; it means you can file a claim for OTC to repair hail damage to your auto.

    Here are a few things to understand about OTC with regards to hail damage:

    You have to pay your deductible for the repairs. Most often, this means that the insurance company will pay you all the money to get the car fixed EXCEPT for your deductible, which you then pay to the repair company that fixed you car. So if $3,000 worth of repairs was needed to fix your car from hail damage, and you have a $500 deductible, then the insurance company will give you $2500 ($3,000-$500 deductible) so you can pay your $3,000 repair bill. The claim settlement might happen in another way, but the logic is still the same.

    Your OTC will pay the actual cash value of the car if the repairs are over a certain threshold (which is determined individually for each car) to make the car usable again. The company can literally “scrap the car and pay you for it” instead of repairing the hail damage. Keep this in mind for when determining if you want to file a claim as some cars aren’t worth much but could be in EXCELLENT condition for driving. You don’t want to lose your car because you filed a claim for cosmetic damage, or keep the car and get a salvage title.

    Talk to your agent to make sure you have OTC. Make sure that the deductible is an amount you can afford to pay in a reasonable amount of time. It’s no good to have a $500, $1000, or $2,000 deductible for OTC if you cannot get the money or put yourself in a poor financial position for 30+ days because of it. Sometimes paying the extra $5-10 per month for a lower deductible makes sense in households strapped for cash.
    Answered on February 20, 2013
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