If you’ve ever bought comprehensive car insurance, you probably know that it covers repairs to your car if it's damaged by fire, natural disaster, vandalism or an accident, even if you're at fault. But what do you know about the repairs process? 

Even after reading the product disclosure statement (PDS) from your insurer, you may not fully understand some of the terms they use to explain how your car will be repaired in the event of a claim. Below we describe six things you should know about car insurance repairs, and explain what the terms used in your insurance documents actually mean. 

On this page:

• 1. You might not get to choose where your car is repaired
• 2. Your insurer might only guarantee the repairs for as long as they insure the vehicle
• 3. Insurers may use aftermarket or used parts
• 4. You might be better off not using your car insurance 
• 5. You can choose your payout in the event of a write-off
• 6. You might not have to pay excess on windscreen claims

Many insurers have a network of repairers and will direct you to one of those to repair your vehicle. If you'd prefer to use a repairer of your choice, you need to look out for a policy that offers this option, or add it as an extra and pay a fee. 

If the insurer chooses your repairer, you may have to travel some distance to drop off your car, get home without a car, and then back out there when it's fixed. But this also means you don't need to get too involved with the repair, and you can leave negotiations with the repairer up to the insurer. In addition, when using the insurer's repairer you can be assured that the only out of pocket cost will be your excess.

If you'd prefer to use a repairer of your choice, you need to look out for a policy that offers this option

If you have the option to choose your own repairer you can pick one in a convenient location, or one you're familiar with. But it can add complications and sometimes extra cost, like if the insurer doesn't agree with the price they charge.

2. Your insurer might only guarantee the repairs for as long as they insure the vehicle

If you choose the right car insurance policy, repairs paid for by your insurer will be guaranteed for the life of the vehicle – this means if they cover repairs to your car and that repair later fails because it was not done properly (or the part was faulty), they will cover the cost to fix it.

However, policies from RAA specify that they only guarantee repairs while they still insure the vehicle (and only if it was repaired at their nominated repairer). This could be problematic if you like to switch insurers regularly to ensure you're always on the best deal. And policies from RACQ allow you to choose your repairer, but will only guarantee repairs if they're carried out at the insurer's repairer.

The rest of the car insurers in our review guarantee repairs either for the rest of the time you (or sometimes your family) own the vehicle, or for the life of the vehicle. Check how your insurer handles this in our car insurance review. 

Here's what to look for:

• Guaranteed while you own the vehicle. This is the case for about two thirds of all car insurance policies regardless of whether you have choice of repairer or not; including those from popular insurers, Allianz, Aldi, Budget Direct, Coles, Everyday, and Youi.The policies from Aldi, Bank of Australia, BOQ and RACQ are slightly more generous, and guarantee the repairs while the vehicle remains owned by you or a family member. 
• Guaranteed for the life of the vehicle. Use the filter in our comparison table, or use Ctrl+F to search the PDS for the term "lifetime" to find a policy that will guarantee repairs for the life of the vehicle. About one third of car insurance policies guarantee repairs for the lifetime of the vehicle including insurers such as AAMI, Bingle, GIO, NRMA, and Suncorp.

3. Insurers may use aftermarket or used parts

Rules about where parts are sourced for repairs are in your policy's PDS and the terms used to describe this vary tremendously, but basically it comes down to four different categories.

• New parts made by the vehicle's original manufacturer. Often called OEM parts (original equipment manufacturer), genuine parts, or genuine new parts. If you want to split hairs, genuine parts come via the car manufacturer, while OEM parts come from a supplier that originally made the part for the car manufacturer when it was new, but is now selling those parts themselves. So the parts are essentially the same, the difference is the logo on the box. Some policies specify that OEM parts are only used during the manufacturer's warranty period, then after that they'll use non-OEM or refurbished parts.
• New parts made by someone else. These are referred to as non-genuine parts, non-OEM parts, or aftermarket parts. They are possibly not quite as good quality as those from the original manufacturer, but they are still brand new. Some insurers specify they use parts that are Australian Design Rules (ADR) compliant. The ADR are the national vehicle safety and performance standards that apply to certain parts of vehicles and are enforced by the states to ensure registered vehicles are roadworthy.
• Refurbished parts have had work done to repair them to near original condition. This could include cleaning, servicing and upgrading. They should have passed quality and safety checks and are more expensive than second-hand parts but cheaper than new ones. Also called reconditioned, remanufactured or exchange parts. 
• Second-hand parts, usually from a vehicle with low mileage that has been de-registered and likely to be in near original condition. Can be from the original manufacturer or from an aftermarket parts manufacturer unless specified (e.g. they might be specifically described as "recycled OEM parts"). Also called recycled or reusable parts.

4. You might be better off not using your car insurance 

For small or cheaper repairs, it can be cheaper in the long run to pay for the repair yourself, rather than claiming on your car insurance. This is because insurers use claims history to assess risk, meaning more claims result in higher premiums in the future. And most use overall claims, not just ones where you're at fault.  

So if a repair is only going to cost a little more than your excess, it might be wise to pay for it out of your own pocket if you can. And it goes without saying that if the cost of repairing your car is less than your insurance excess, you'll save money by not claiming on your car insurance.

5. You can choose your payout in the event of a write-off

When taking out your policy, most insurers give you the option to be paid either an agreed value or market value if your car is deemed too expensive to repair. 

• Agreed value is when you specify a dollar figure (that your insurer deems reasonable) to be paid if your car is written off. It costs a bit extra to specify an agreed value, but gives you peace of mind that you will have enough to replace your car with something you're happy with should it be written off, and if your car has depreciated your payout won't be affected. 
• Market value fluctuates according to the price an average car like yours would sell for (if it wasn't damaged) at the time that the insurer pays out. It's not what you paid for your car, what it was worth when you took out the policy, or what it's worth to you. It may be less than you expect. Most policies provide a market value payout by default. 

6. You might not have to pay excess on windscreen claims

Almost one in five policies offer zero excess on glass repairs once a year as standard. This is because replacing damaged glass often costs less than your excess. Find these policies in our car insurance review or open the PDS and do a search (Ctrl+F) for "windscreen" or "glass".

Almost all of the rest offer zero or reduced excess on glass repairs as an additional feature for an extra fee. Some offer one repair with zero excess, and others offer optional excess reduction for repair.

Some insurers have limits on the number of repairs or replacements, and some will repair, but not replace. 

Stock images: Getty, unless otherwise stated.

Join the conversation

To share your thoughts or ask a question, visit the CHOICE Community forum.

Visit CHOICE Community