Haris Ashley
Car repair insurance, also known as mechanical breakdown insurance, is an optional add-on to your standard car insurance policy. It covers the cost of repairing mechanical breakdowns that your regular car insurance doesn't cover. This includes engine or transmission issues, problems with steering or electrical systems, and other mechanical breakdowns. The cost of car repair insurance varies depending on factors such as the age and model of the car, the insurer, the specific policy, and the deductible. While it can provide peace of mind and protect you from unexpected repair bills, it might not be worth it for everyone. It's important to consider factors such as the age and reliability of your car, the likelihood of needing repairs, and whether you already have coverage through a warranty or insurance policy.
| Characteristics | Values |
|---|---|
| What is car repair insurance? | A type of auto insurance coverage that pays to fix mechanical malfunctions after a car’s original warranty expires. |
| What does car repair insurance cover? | Mechanical malfunctions for your car's major systems, such as engine and transmission. |
| What does car repair insurance not cover? | Cosmetic elements, like your exterior trim and leather seats, regular maintenance, like oil changes, alignments and tire rotations, normal wear-and-tear items, like brake pads, rotors and tires, repairs needed as a result of neglect, like your engine failing because you didn’t change the oil, damage resulting from an accident, modification, abuse or misuse. |
| How does car repair insurance work? | Car repair insurance is similar to extended warranties or service contracts sold by auto manufacturers and dealers. It covers the same kinds of things, which means it will pay to fix mechanical problems after your car’s new warranty has expired. |
| Car repair insurance vs. extended warranties | Car repair insurance is often cheaper and more flexible than an extended warranty, but extended warranties have fixed costs and lower deductibles. |
| Is car repair insurance worth it? | Car repair insurance is worth it for some drivers because it removes worries about big expenses. But for most people, auto repair insurance is not a good value. |
| Car repair insurance companies | Geico, Allstate, Progressive, Mercury, Olive, AAA, National General Insurance |
What You'll Learn
- Car repair insurance covers major mechanical failures, such as engine or transmission issues
- It does not cover routine maintenance, wear and tear, or accident damage
- It's worth considering if you can't afford a large repair bill
- It's not worth it if you have an emergency fund or reliable car
- It's also not worth it if you have a new car with a warranty
Car repair insurance covers major mechanical failures, such as engine or transmission issues
Car repair insurance, also known as mechanical breakdown insurance (MBI), is a separate type of policy that covers mechanical failures on your vehicle. While standard car insurance policies typically don't cover mechanical issues unless they're related to a covered peril, MBI fills this gap by covering mechanical breakdowns that your regular car insurance doesn't.
MBI covers major mechanical failures, such as engine or transmission issues, problems with steering or electrical systems, and various other mechanical breakdowns. For example, if your vehicle's engine malfunctions after an accident and your mechanic can prove that the accident caused the issue, MBI will cover the repairs.
The specifics of what's covered by MBI depend on the insurance company and your chosen plan. Basic MBI plans may only cover the vehicle's powertrain, including the transmission, engine, and drivetrain. In contrast, more comprehensive plans can cover electrical systems, steering, fuel systems, air conditioning, brakes, and exhaust systems. Some plans even include "extras" like roadside assistance or trip interruption coverage.
When deciding whether to purchase MBI, consider factors such as your vehicle's age and mileage, the eligibility requirements of the insurance company, and whether an extended warranty might be a better option for your situation. Additionally, weigh the potential savings against the cost of the insurance and the likelihood of needing an extensive repair.
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It does not cover routine maintenance, wear and tear, or accident damage
Car repair insurance, also known as mechanical breakdown insurance (MBI), is an optional add-on to your regular auto insurance policy. It covers repairs to your vehicle's major parts, such as the engine, transmission, steering, electrical systems, etc. However, it's important to note that car repair insurance does not cover routine maintenance, wear and tear, or accident damage.
Routine maintenance includes tasks such as oil changes, engine tune-ups, tire rotations, and suspension alignment. These are the responsibility of the car owner and are not typically covered by insurance.
Wear and tear refer to the gradual deterioration of vehicle parts due to regular use over time. This can include worn brake pads, tires, and other mechanical or electrical components. Car repair insurance does not cover the cost of replacing or repairing these items.
Accident damage refers to any repairs needed due to a collision or other covered incident, such as fire, theft, or vandalism. While car insurance may cover repairs for accident damage, car repair insurance specifically excludes these types of repairs.
It's important to carefully review the details of any car repair insurance policy before purchasing it to understand what is and isn't covered. Each plan is unique, and there may be exclusions or limitations that could affect your coverage. Additionally, car repair insurance is typically only available for newer vehicles with low mileage and may not be suitable for older cars.
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It's worth considering if you can't afford a large repair bill
Car repair insurance, also known as mechanical breakdown insurance, is an optional insurance product that covers the cost of unexpected vehicle repairs arising from normal use. It is worth considering if you cannot afford a large repair bill.
Car repairs can be surprisingly expensive, often ranging from a few hundred dollars to several thousand dollars. For example, fixing a car's air conditioner can cost anywhere from $100 to $1,500, and transmission replacement can range from $1,500 to over $6,000. If you don't have the savings to cover a surprise bill for a major repair, car repair insurance could be a wise choice.
According to a ConsumerAffairs survey, almost 60% of drivers don't have enough money in the bank to cover a $1,000 repair bill. In such cases, car repair insurance can provide peace of mind and protect you from large repair bills.
It's important to note that car repair insurance doesn't cover routine maintenance or damage from accidents. It also has limitations, such as only being available for newer vehicles and having deductibles that can range from $100 to $500. Additionally, most policies won't cover cosmetic elements, regular maintenance, normal wear and tear, repairs needed due to neglect, or damage resulting from accidents or modifications.
When deciding if car repair insurance is worth it, consider your vehicle's age, reliability, and existing warranty coverage. It might be more beneficial to build an emergency fund or get an extended warranty, especially if your car is older or has high mileage.
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It's not worth it if you have an emergency fund or reliable car
Car repair insurance, also known as mechanical breakdown insurance, is an optional add-on to your standard car insurance policy. It covers the cost of repairs to your vehicle's mechanical and electrical systems in the event of a breakdown or malfunction. This can include issues with the engine, transmission, steering, fuel system, and more. However, it's important to note that car repair insurance does not cover routine maintenance, wear and tear, or accident-related damages.
When considering whether car repair insurance is worth it, there are several factors to take into account. One key factor is the age and reliability of your vehicle. If you have a newer car that is still under the manufacturer's warranty, you may not need car repair insurance as the warranty typically covers mechanical issues. Additionally, if you have an older car that has been reliable and hasn't required major repairs, you may be better off without it.
Another important consideration is your financial situation. If you have an emergency fund or savings that could cover the cost of unexpected repairs, then car repair insurance may not be necessary. For example, if you have enough money set aside to cover the deductible for a major repair, such as a new transmission, then you might not need the additional coverage.
In summary, car repair insurance may not be worth the additional cost if you have a reliable vehicle with a good warranty, or if you have the financial means to cover unexpected repairs. It is designed to provide peace of mind and protect you from high repair costs, but for those with reliable cars and adequate savings, it may be an unnecessary expense.
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It's also not worth it if you have a new car with a warranty
If you have a new car with a warranty, auto repair insurance is not worth it. New car warranties typically last for a few years or a certain number of miles, whichever comes first. During this period, the manufacturer will cover the cost of repairs for any mechanical defects.
For example, Ford's new vehicle limited warranty for 2021 vehicles states that it will "without charge, repair, replace, or adjust all parts on your vehicle that malfunction or fail during normal use during the applicable coverage period due to a manufacturing defect in factory-supplied materials or factory workmanship." The bumper-to-bumper warranty is good for three years or 36,000 miles, and the powertrain warranty is good for five years or 60,000 miles.
As such, purchasing auto repair insurance on top of a new car warranty would be redundant and unnecessary. It is worth noting that auto repair insurance is typically only available for new or leased cars with low mileage. For example, GEICO's auto repair insurance is only available for cars under 15 months old with less than 15,000 miles.
Additionally, auto repair insurance does not cover routine maintenance or wear and tear, which are typically excluded from new car warranties as well. Therefore, if you have a new car with a warranty, auto repair insurance is not worth the additional cost.
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Frequently asked questions
Car repair insurance, also known as mechanical breakdown insurance, is a type of auto insurance coverage that pays to fix mechanical malfunctions after a car’s original warranty expires.
Car repair insurance covers mechanical malfunctions for your car's major systems, such as the engine and transmission. It also covers steering, air conditioning, and the car's fuel system (some policies).
Car repair insurance does not cover repairs needed as a result of neglect, like your engine failing because you didn't change the oil. It also does not cover cosmetic elements, like your exterior trim and leather seats, or normal wear-and-tear items, like brake pads, rotors, and tires.
Car repair insurance might be worth it if you can't afford a large repair bill, don't like your factory warranty, or want peace of mind. However, it might not be worth it if you have an emergency fund or reliable car, or if your car is still under warranty.
The cost of car repair insurance depends on factors such as the age and mileage of your car, the specific policy and its benefits, and the insurer. It typically ranges from $30 to $100 or more per year, with deductibles of $100 to $500.
