Multifunctional materials inspired by biological structures have attracted great interest, e.g. for wearable/ flexible "skin" and smart coatings. A current challenge in this area is to develop an artificial material which mimics biological skin by simultaneously displaying color change on damage as well as self healing of the damaged region. Here we report, for the first time, the development of a damage sensing and self healing magnet-polymer composite (Magpol), which actively responds to an external magnetic field. We incorporated reversible sensing using mechanochromic molecules in a shape memory thermoplastic matrix. Exposure to an alternating magnetic field (AMF) triggers shape recovery and facilitates damage repair. Magpol exhibited a linear strain response upto 150% strain and complete recovery after healing. We have demonstrated the use of this concept in a reusable biomedical device i.e., coated guidewires. Our findings offer a new synergistic method to bestow multifunctionality for applications ranging from medical device coatings to adaptive wing structures.