When your car suffers accident damage, you usually have several options. If the damage isn't severe and no other drivers or property were involved, then you may choose to live with it or repair it at your own expense. This approach can potentially save you some money since filing a claim against your collision coverage can sometimes result in higher premiums.

However, this decision won't always be entirely in your hands. Several factors can potentially influence how you approach an accident and whether you can use your insurance settlement as you see fit. Keep reading to discover three things that may affect your decision to repair your vehicle after a collision.

1. You Have a Loan

Financing a car means that the lender has partial ownership of your vehicle. Since the bank has a stake in the property, you'll usually need to follow specific requirements, such as maintaining collision or comprehensive coverage. Likewise, insurers typically notify lenders of claims since the lender will usually be a loss payee on the policy.

In these cases, you'll almost always need to use the settlement money to repair your car. Working with an experienced collision repair shop is usually the best approach since they can work directly with your insurer to guarantee that the vehicle receives adequate repairs. If in doubt, contact your lender to determine their policy on accidents and repairs.

2. You Want to Keep Collision or Comprehensive Coverage

While liability insurance protects others from damage you cause, collision and comphrensive insurance protect your property. Most insurers will only allow you to maintain this level of coverage if you use it to repair your vehicle following a claim. For example, if you hit a telephone pole and claim it on your collision policy, your insurer will usually want proof that you repaired the damage.

Although this may seem unfair, it's for a good reason: your policy's purpose is to make you whole following an accident. If your vehicle has significant existing damage, then it may be more challenging to assess future claims. However, policies can vary, so it's a good idea to talk to your insurer to determine if this is the case.

3. You're Worried About Resale

Collisions almost always reduce your car's resale value, but unrepaired damage can significantly impact the worth of your vehicle. Keeping your settlement puts more money in your pocket right now, but it can hurt your bottom line in the future. Unless you don't intend to sell or trade in your car anytime soon, it's almost always more cost-effective to repair the damage than to live with it.

Look for a collision repair shop like Exoticar Paintworks Inc to find out more.