Repair Person: Insurance Essentials

If you're hiring a repair person, it's important to ensure they have the appropriate insurance coverage. The specific type of insurance they need will depend on the nature of the work and the local regulations. Here's an overview of the different types of insurance that repair persons may need to carry.

One common type of insurance for repair persons is general liability insurance, which can protect them from financial losses if they are found liable for property damage or bodily injury to a third party. This type of insurance is particularly important for repair persons who work in people's homes or businesses, as it can provide coverage in the event of accidental damage to a customer's property.

Another type of insurance that may be relevant for repair persons is professional liability insurance, also known as errors and omissions insurance. This type of insurance protects them if a customer alleges that their work was inaccurate, incomplete, or negligent and resulted in financial harm. This type of insurance is especially important for repair persons offering specialised services, such as electrical or plumbing work, where mistakes can have significant consequences.

In addition to the above, repair persons who have employees should also consider workers' compensation insurance, which can provide coverage for medical expenses and lost wages if an employee is injured on the job. This type of insurance is typically mandated by law and can protect the repair person from potential lawsuits arising from workplace injuries.

Finally, repair persons may also want to consider commercial auto insurance if they use vehicles for their business. This type of insurance can provide coverage for accidents, property damage, and other vehicle-related incidents that occur during work-related activities.

Collision coverage

The decision to purchase collision coverage depends on several factors. These include the value of your vehicle, your ability to pay for repairs out of pocket, and whether your vehicle will be in storage for an extended period. Collision coverage may be particularly useful if your vehicle is new or has a high value, as it can help cover expensive repairs or replacement costs.

Additionally, when considering collision coverage, it is worth noting that you have the right to choose the auto repair shop that fixes your vehicle. However, your insurance company may put certain restrictions on the repairs and may require multiple repair estimates to ensure a reasonable cost.

Comprehensive coverage

When choosing comprehensive coverage, it is essential to review the policy thoroughly and ask questions to ensure you understand what is and isn't covered. For instance, some policies may have exclusions for specific repairs, such as replacing the coolant or tires.

Additionally, comprehensive coverage has limits on the repair shops you can use. Insurance providers usually require that you have your vehicle serviced at a specific, approved auto repair shop. This is an important consideration if you have a trusted repair shop that you prefer to use.

Car repair insurance

When considering car repair insurance, it's worth noting that not all insurers offer this type of coverage, and those that do often have limitations. For example, you might only be able to purchase car repair insurance for a new vehicle with low mileage, and the coverage may end once your vehicle reaches a certain age or mileage. Additionally, there may be restrictions on which repair shops you can use for covered repairs.

The cost of car repair insurance varies depending on the insurer, the specific policy, and the age and model of the car. It typically includes a deductible, which is the amount you have to pay out of pocket before the insurance coverage kicks in. This deductible usually ranges from $100 to $500.

Before purchasing car repair insurance, it's important to review the limitations and exclusions of the policy carefully. In some cases, an extended warranty from a car dealer or an auto club may provide similar coverage. Alternatively, you could consider setting aside money in an emergency fund to cover unexpected repair costs.

Mechanical breakdown insurance (MBI)

MBI is worth considering if you are buying a new car, planning to keep your car for a long time, or are concerned about paying for unexpected repair costs out of pocket. It is also a good option if your car is likely to break down and is expensive to repair.

MBI typically costs around $100 per year, with an average deductible of $250. The cost can vary depending on the vehicle and the insurance company. It is only available for new or relatively new vehicles, so the cost of a policy will depend on how long the policy lasts, the value of the car, the mileage, and the type of vehicle. Luxury cars and electric vehicles, for example, tend to be more expensive to repair.

When you purchase MBI, you will typically pay a premium in monthly instalments for the duration of the coverage period. If your vehicle experiences a covered mechanical breakdown, you will file a claim with your MBI provider. Some MBI policies require you to take your car to a specific repair facility, while others allow you to choose your own repair shop. Once your claim is approved, your MBI provider will pay for the cost of the repair or replacement, minus any deductible that you are responsible for.

It is important to note that MBI does not cover routine maintenance, such as oil changes, tire rotations, or brake pad replacements. It also does not cover wear and tear on parts such as belts, hoses, and brakes. Additionally, MBI does not provide coverage for towing or damage resulting from accidents, collisions, or environmental factors.

Extended warranty coverage

Extended warranties cover repairs and replacements after breakdowns that come from normal use. They function like insurance policies, protecting you from unpredictable car repair costs. Instead of paying out of pocket for repairs, you only need to pay a small deductible if your repairs are covered under warranty.

Extended warranties are especially useful if you own a highly unreliable vehicle with expensive repair costs. They are also a good idea if you want peace of mind, a predictable auto budget, or plan on owning your vehicle for a long time.

There are three main types of extended warranty coverage plans:

• Bumper-to-bumper: These plans are also referred to as exclusionary coverage. They protect almost all mechanical and electrical components between your bumpers, aside from a list of exclusions.
• Stated-component: These plans are also called named-component or inclusionary coverage. They list each covered component in the agreement.
• Powertrain: These plans cover only the major systems of your vehicle, including the engine, transmission, and drive axles.

The best extended warranty for you will depend on your needs. Endurance, for example, is a good option for those seeking comprehensive coverage. It offers six tiers of protection, ranging from basic powertrain coverage to factory-level coverage. Its plans also come with benefits like roadside assistance, rental car reimbursement, and trip interruption coverage.

Carchex, on the other hand, is a good option for those with used cars. It offers plans for up to 10 years in length and is more affordable for long-term contracts. Its five coverage levels include factory-level coverage, basic protection, and everything in between.

Autopom! is another extended warranty provider with excellent customer service ratings. It offers three plans, including bumper-to-bumper, mid-level, and powertrain-plus coverage.

CarShield is a good option for those seeking flexible contracts with affordable monthly payments. Its eight warranty plans can also last up to 300,000 miles, one of the longest coverage periods in the industry.

Lastly, Olive is a good option for those seeking a simple, transparent, and affordable extended warranty. It offers three plans with varying levels of coverage, from bumper-to-bumper to basic powertrain protection.

When choosing an extended warranty, it is important to consider the types of repairs you expect to need and your budget. Be sure to read the fine print of the contract and compare prices from multiple providers before making a decision.

Frequently asked questions