Insurance does not cover the cost of repairing a car’s mechanical failure, such as a burst gasket or a broken electrical system. A standard auto insurance policy provides coverage for comprehensive damage, collisions, auto theft, and policyholder-caused fires. However, you can consider car repair insurance, if you want coverage for mechanical issues and check if it is worth it.
Car repair insurance (mechanical breakdown insurance) may be worth it for new cars with low miles without an extended warranty. It covers major car repairs like the drivetrain, engine, and transmission. This article will explain all you need to know about car repair insurance, including what it covers, how much it costs, and if it’s a worthwhile investment.
How Does Car Repair Insurance Work
Car repair insurance is an additional coverage that activates when you need it, just like any other type of coverage you might buy for your vehicle. It has a deductible, just like a lot of other insurance plans. Additionally, you can choose to add auto repair insurance to an existing policy if your current auto insurance provider offers it. You have the option to buy it separately from businesses like Progressive.
The following is a procedure of how car repair insurance works;
- You buy auto insurance with a $250 deductible, for example.
- When your car breaks down a year later, the mechanic informs you that you will need to replace the transmission, which will set you back about $8,000.
- After you pay your $250 deductible and file a claim on your auto insurance, your insurance pays the remaining $7,750 toward the repairs.
Car repair insurance can save you a significant amount of money because it is typically so inexpensive, averaging only $100 annually. It also ensures that you won’t have to worry about settling debt to pay for costly car repairs unless you have several thousand dollars saved up.
What Does Car Repair Insurance Cover
The products that are covered by mechanical breakdown insurance vary depending on the car insurance provider, but usually consist of:
- Air conditioning.
- Brake mechanism.
- Convenience technology (sunroof, keyless entry, and convertible top).
- Heating and cooling systems.
- Drive axle.
- Electrical systems, such as the computer in the car.
- Engine output.
- Engines.
- Technology for safety (such as cameras and blind sport awareness systems).
- Components for steering.
- Systems of suspension.
- Transmission.
If you file a claim under mechanical breakdown insurance, there is a deductible alongside your auto insurance. The sum deducted from the payout of a claim is known as a deductible. Also, insurers may differ in the amount of the deductible.
What Does Car Repair Insurance Not Cover
Mechanics breakdown insurance excludes a variety of things and losses, depending on the auto insurer, but in general, it excludes:
- Rust and corrosion.
- Damage brought on by careless maintenance, such as frequent oil changes or the use of incorrect fuel.
- Damage incurred in a vehicle collision.
- Non-mechanical components, such as car molding and trim.
- Typical deterioration, such as worn tires and brake pads.
- Items or components are subject to a recall.
- Items or parts that are covered by an optional manufacturer repair program.
- Items or parts that are covered by your auto warranty.
- Damage that existed before you purchased the insurance.
- Regular upkeep, such as tire rotation, wheel balancing, oil changes, suspension alignment, and engine tune-ups.
How Much Does Car Repair Insurance Cost
The annual cost of a car repair insurance policy can range from $30 to $100. However, if you plan to budget for this kind of insurance, you should pay an average of $100 annually, or $700 throughout the policy. Your deductible amount is the primary factor determining your policy’s cost. You can usually choose a deductible amount from $100 to $500 with most insurers. Your monthly payment will be less the higher your deductible is.
Is Car Repair Insurance Worth It
Depending on how much something breaks, car repair insurance might seem worth it for you because it can cover you from unanticipated repair costs. If you cannot afford to pay for a major mechanical failure in your car, auto repair insurance may be a worthwhile option. Remember that if you file a claim, there will be a deductible that you must pay for repairs.
Final Thought
Car repair insurance, also known as mechanical breakdown insurance, is a worthwhile investment for new cars with few miles on them without an extended warranty or manufacturer’s warranty. It provides coverage against significant mechanical breakdowns and pays for their repairs. When choosing car repair insurance, it’s crucial to weigh premiums against peace of mind. Lastly, if you’re willing to pay extra monthly for car repair insurance, it may be the best option for covering significant mechanical issues.