Unraveling The Auto Insurance Repair Process: A Step-By-Step Guide

Car insurance can help protect your finances by paying for car repairs, but it doesn't cover everything. A standard car insurance policy typically includes up to five major types of coverage: medical payments, personal injury protection, uninsured/underinsured motorist coverage, liability coverage, and collision coverage. Comprehensive coverage is also an option, which covers damage that is not related to a collision, such as damage from falling objects, fire, natural disasters, and vandalism.

Standard auto insurance policies don't cover wear and tear, routine maintenance, and mechanical failures. However, you can add additional coverage to a standard policy, such as mechanical breakdown insurance (MBI), which covers mechanical repairs.

What auto insurance covers

Auto insurance covers the cost of repairs to your car after an accident or certain other events, depending on the type of coverage you have.

Liability-Only Coverage

If you only have liability insurance, the minimum coverage required in most states, your policy will cover repairs to another person's car if you cause an accident. It will not cover repairs to your own vehicle.

Full Coverage

Full coverage includes liability insurance as well as additional coverage for damage to your car. It includes collision insurance, which covers repairs to your car after an accident, regardless of who is at fault. It also includes comprehensive coverage, which pays for repairs after events such as vandalism, fire, or damage from falling objects or natural disasters. Comprehensive coverage also covers damage from collisions with animals.

Car Repair Insurance

Also known as mechanical breakdown insurance (MBI), this type of insurance covers mechanical repairs to your vehicle that are not caused by an accident. This includes repairs to engine parts, the transmission, and other major systems. However, MBI does not cover normal wear and tear, such as replacing brake pads or spark plugs.

MBI is not included in standard auto insurance policies and is not available for all vehicles. It is typically only offered for new cars with low mileage and may need to be purchased within a certain time frame.

Extended Warranty

An extended warranty can provide similar coverage to MBI, protecting against mechanical breakdowns. It can be purchased from a dealership or a third party and may be a more affordable option than MBI. However, extended warranties also have limitations on what they cover and for how long.

Add-Ons

There are additional types of coverage you can add to your auto insurance policy to help with repairs:

• Roadside assistance can cover repairs when you're stuck on the road, such as changing a flat tire or jump-starting a dead battery.
• Rental car reimbursement insurance helps pay for a rental vehicle while your car is being repaired after an accident or another covered event.
• Accident forgiveness can be added to your policy to prevent insurance rates from increasing after your first at-fault accident.

When auto insurance won't pay for repairs

Auto insurance repairs work by covering the cost of repairs to your car after an accident or another covered incident. The type of coverage you have will determine what is and isn't covered.

Auto insurance typically won't cover repairs related to routine maintenance or wear and tear. This includes things like oil changes, suspension alignment, tire rotation, and worn brake pads. Mechanical breakdowns are also generally not covered by standard auto insurance policies. This includes issues like a blown gasket or electrical system problems. In these cases, you would need to have a separate mechanical breakdown insurance policy or an extended warranty to cover the cost of repairs.

Additionally, auto insurance may not cover repairs if the damage was caused by:

• Poor maintenance: For example, if you didn't change your oil frequently enough or used the wrong type of fuel.
• A car accident: In some cases, you may need collision coverage in addition to your standard policy to cover repairs after an accident.
• Pre-existing damage: Repairs for damage that occurred before you purchased the insurance policy may not be covered.
• Normal wear and tear: This includes things like worn brake pads and tires.
• Parts or items covered by a recall, voluntary manufacturer repair program, or your car warranty: In these cases, the manufacturer or warranty provider would typically be responsible for covering the cost of repairs.

It's important to carefully review your auto insurance policy to understand what is and isn't covered, as well as to consider additional coverage options that may be available to you.

Mechanical breakdown insurance

MBI is similar to an extended warranty for your car, but it is bought from an insurance company. It covers repairs to internal systems and components, such as the heating and cooling system, internal computer and GPS, and safety technology. It does not cover damage resulting from an accident, exterior damage, general maintenance, wear and tear, or tyre issues.

MBI is available for new or leased cars that are less than 15 months old and with less than 15,000 miles on the clock. The customer must also be the first owner of the vehicle. Once purchased, MBI can be renewed for up to seven years or 100,000 miles, whichever comes first. After paying a deductible (usually between $100 and $500), MBI will cover the remaining cost of repairs to most original mechanical parts of the car, except for maintenance and wear and tear.

MBI is a good option for those with older cars or vehicles with high mileage, which are more likely to break down. It may also be a good option for those with luxury cars, which can be more expensive to repair. However, it is not necessary for new car owners, as new cars usually come with a warranty.

Collision coverage

When deciding whether to opt for collision coverage, it is important to consider the cost of your car and its potential corresponding repairs, as well as your willingness to pay for repairs under the amount of the deductible. A higher collision deductible can lower your monthly premium but may put you at risk in the event of an accident.

In addition to collision coverage, auto insurance providers may offer optional add-ons such as roadside assistance and rental car reimbursement insurance to cover other costs related to car repairs.

Comprehensive coverage

When filing a claim under comprehensive coverage, you will be responsible for paying a deductible, which is the amount you agree to pay before the insurance company starts paying for damages. The deductible amount can vary by insurer. Generally, a higher deductible will result in lower insurance costs, while a lower deductible will lead to higher insurance costs.

Frequently asked questions