Auto Insurance: Mechanical Repairs Covered?

Standard car insurance typically does not cover mechanical repairs unless they are directly caused by an accident or other peril covered by the insurance policy. If your vehicle is relatively new or you have an extended warranty, the manufacturer may pay for repairs in the event of a mechanical breakdown. However, you can purchase mechanical breakdown insurance (MBI) as an add-on to your auto insurance policy to cover mechanical failures. This type of insurance is similar to a car warranty and covers the costs of repairs if your vehicle breaks down, needs replacement parts, or suffers other mechanical problems.

Mechanical breakdown insurance

MBI is similar to an extended car warranty in that it covers many of the same components. However, MBI does not cover the replacement of wear-and-tear items like brake pads, spark plugs, filters, or tires. It is important to note that not all auto insurance providers offer MBI, and those that do often have limitations on when it can be purchased. For example, you might only be able to buy MBI when your vehicle is below a certain age or mileage level. GEICO, for instance, offers MBI for new or leased cars that are less than 15 months old and have less than 15,000 miles on the clock.

MBI covers breakdown-related auto repairs when your manufacturer's warranty expires or fails to cover mechanical failures. After paying your deductible, MBI will directly cover the remaining cost of your covered repairs with your service provider. This insurance is available for various vehicles, including cars, trucks, and SUVs.

MBI does not provide coverage for routine maintenance, such as oil changes, tire rotations, or brake pad replacements. It also does not cover towing or damage resulting from accidents, collisions, or environmental factors.

Comprehensive coverage

It's important to note that comprehensive coverage does not include mechanical breakdowns due to normal wear and tear. For protection against mechanical failures unrelated to accidents or external events, you would need to purchase mechanical breakdown insurance (MBI) or a vehicle protection plan. These policies serve as an extension of your auto insurance and can be particularly useful for new or leased vehicles.

MBI provides coverage for repairs or replacement parts needed due to mechanical breakdowns. It is available for various vehicles, including cars, trucks, and SUVs. This type of insurance can be purchased separately and offers benefits like flexible deductibles and the freedom to choose your repair shop. Additionally, MBI covers parts and labour for approved repairs, giving you added peace of mind.

In summary, comprehensive coverage is an essential component of auto insurance, offering financial assistance for mechanical repairs resulting from accidents or specific external events. For broader protection against mechanical failures, MBI or a vehicle protection plan can be added to your insurance package, ensuring you're prepared for unexpected breakdowns and minimising out-of-pocket expenses.

Collision coverage

Car insurance typically does not cover mechanical issues unless they are related to a covered peril, such as a car accident, collision with an animal, or damage caused by objects like a fallen tree branch. Collision coverage is an optional insurance policy that covers the cost of repairing or replacing your vehicle if it is damaged in an accident, regardless of who is at fault. This includes collisions with other vehicles or objects such as guardrails or trees.

When deciding on the amount of your deductible, consider the cost of your car and its potential repair costs, as well as your willingness to pay for repairs under the deductible amount. A higher collision deductible will lower your monthly premium, but it means you will cover more of the repair costs when they arise.

Vehicle protection plans

A vehicle protection plan is a service contract that covers repairs for certain car components in the event of a mechanical breakdown. These plans are purchased separately from car insurance and are designed to ensure that you don't have to pay out of pocket for unexpected repairs after your factory warranty expires. It's important to note that a vehicle protection plan is not a substitute for car insurance, and in the event of an accident, you'll still need to file a claim through your insurance provider.

There are two main types of vehicle protection plans: bumper-to-bumper warranties and powertrain warranties. Bumper-to-bumper warranties cover almost all vehicle components, while powertrain warranties only cover essential parts and systems like the engine, transmission, and drive axles. The cost of a vehicle protection plan can vary depending on factors such as the plan chosen, deductible, location, and vehicle make, model, age, and mileage. On average, a plan can cost between $2,500 and $4,000.

Overall, a vehicle protection plan can be a valuable financial safety net for drivers, especially for those with vehicles that are more prone to breakdowns or have higher repair costs. By assessing your budget, vehicle reliability, and estimated repair costs, you can determine if a vehicle protection plan is the right choice for you.

Extended warranties

Firstly, extended warranties have a bad reputation due to aggressive and misleading sales tactics, confusing fine print and exclusions, and difficulties in getting claims approved. It's crucial to carefully read the terms and exclusions of the warranty agreement and understand exactly what is and isn't covered. Additionally, extended warranties usually come with a high upfront cost, and the coverage restrictions often make it more cost-effective for car owners to pay for repairs themselves.

Another option to consider is mechanical breakdown insurance (MBI), which can be purchased as a separate policy. MBI provides coverage for breakdown-related auto repairs and offers broader protection than extended warranties, often at a lower price. MBI covers a wider range of mechanical issues and can be maintained for a longer period. It also allows car owners to pay as they go, rather than paying a large lump sum upfront.

Before deciding on an extended warranty, it's worth comparing it with other options like MBI or vehicle protection plans to ensure you're getting the best value and coverage for your needs.

Frequently asked questions