Do You Need Car Repair Insurance?

February 07, 2023
Auto Repair
There's no denying it: Cars can be extremely dangerous. Every time you start your engine and pull out onto the road, you're taking responsibility for the risks your car represents to people and property you might encounter. This is why auto insurance is so important — it helps protect you from the financial repercussions (i.e. paying out of pocket) of being found at fault in an auto collision. In fact, nearly every state in the country requires that drivers have at least a minimum amount of liability coverage before they start driving. Otherwise, they face fines and other penalties.

But accidents and collisions aren't the only risks to cars, trucks, RVs, and other vehicles, and sometimes automobile damage has nothing to do with fault.

For those times when you need help repairing your vehicle and you haven't been involved in an accident, consider auto repair insurance.

What Is Auto Repair Insurance?

Auto repair insurance (also called car repair insurance or mechanical breakdown insurance) is a kind of insurance that provides coverage for possible mechanical issues or other repairs not related to collisions, theft, fires, or any of the risks addressed by traditional auto insurance. You can think of auto repair insurance as a sort of extended-extended warranty; when your car's original warranty expires, car repair insurance can help keep repair costs manageable and protect you from potentially account-draining mechanical failures.

Auto repair insurance coverage can be added to your current auto insurance policy. But because it is not required in any state, it tends to get overlooked. Still, when your brakes start to fail, ignition systems die, or sensors need to be replaced, having insurance to fall back on and help with repair costs can be a major advantage. This optional form of coverage is something that you'll want to research as a possible addition to your standard car insurance.

Does Car Insurance Cover Repairs?

As a general rule, traditional car insurance does not cover standard repairs. Auto insurance is designed to address issues such as collisions, fires, accidents, theft, etc. Auto repair insurance, on the other hand, picks up where standard car insurance stops, offering policyholders more financial support for the kinds of car repairs that aren't covered by liability insurance.

Auto Repair Insurance vs. Extended Warranties

In a previous section, we compared car repair insurance to extended warranties. But while both are options for protecting your car and its vital components from unexpected breakdowns, there are certain key differences you should be aware of.

Unlike car repair insurance, an extended warranty is something that is generally purchased through a car dealership or auto club, and paid for all at once as a lump sum or rolled into car-loan payments through auto financing. Extended warranty plans may be limited to only specific systems, or they might offer bumper-to-bumper coverage for every part of the car. An extended warranty is limited in terms of duration — it is designed to expire after a specified length of time or once the automobile reaches a certain mileage.

Auto repair insurance, on the other hand, is purchased through an insurance company and requires that ongoing payments be made regularly (usually on a monthly or semi-yearly basis). With few exclusions, car repair insurance provides full-car coverage. This form of insurance remains in effect for as long as you keep your policy active, though you may need to drop your coverage as the car gets older and more difficult to maintain.

What Does Auto Repair Insurance Cover?

Because auto repair insurance is completely optional, there are no set, concrete standards about what is and is not covered. That said, most car repair insurance policies cover the full range of mechanical malfunctions to the major systems of your vehicle. These tend to include (but are not necessarily limited to) the following:

  • Air conditioning systems
  • Brakes
  • Computer systems
  • Cooling systems
  • Electrical systems
  • Engine
  • Exhaust systems
  • Fuel systems
  • Power steering
  • Transmission

What Is Not Covered by Auto Repair Insurance?

Despite the bumper-to-bumper nature of car repair insurance, there are some types of coverage that are not generally included, such as the following:

  • Collision damage
  • Damage caused by poor or infrequent maintenance
  • Non-mechanical items
  • Normal wear and tear
  • Parts or items covered by recalls or car warranties
  • Routine maintenance
  • Rust or corrosion

As a general rule, if your car suffers mechanical problems not related to an accident, your auto repair insurance policy should cover the cost of repair up to any established coverage limits. Just remember that different insurers offer different policies, so be sure to become fully familiar with the coverage you'll be getting before you purchase car repair insurance.

How Does Auto Repair Insurance Work?

Not every insurance company offers auto repair insurance, and those that do will want to make sure that you and your car are safe investments before they issue you a policy. In most cases, you'll need to take out your car repair insurance policy while your car is still relatively new — within months or weeks of the expiration of the original warranty. Again, these are details that you'll need to be aware of as you consider your auto repair insurance options.

When a system fails and requires repairs, you will need to submit a claim to your auto repair insurance company to get pre-authorization. You will then be able to select from a list of authorized repair shops to handle the issue. Be aware that the car repair insurance policy will only pay for repairs over the established deductible (generally up to $250), so many minor repairs will still require that you pay out of pocket.

Is Car Repair Insurance Right for Me?

Whether car repair insurance is right for you is a question that only you can answer. But if you would like the extra peace of mind that comes from not having to worry about paying for major vehicle repairs, and if your car warranty is limited or is getting ready to expire, then purchasing an auto repair insurance policy may be a good idea.

Just be sure that you know what you're getting into — research how the repair process will go and what kinds of repair shops are authorized under your policy. Also, find out whether the service provider is going to be responsible for covering repairs, or if you'll need to pay upfront and then wait for reimbursement. Working with your insurance company to get a clear picture of exactly how much coverage an auto repair insurance policy offers can save you a lot of trouble down the line, as will learning about the different types of auto insurance in general.

Interested in learning more about your car repair insurance options or connecting with reliable insurance companies? Contact us today to get started, or request a quote online, and secure the insurance you need to drive with confidence. 

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