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If your car has a mechanical breakdown, like a blown gasket or an electrical system on the fritz, your car insurance policy won’t cover the cost of repairs. That’s because a standard car insurance policy covers only car accidents and other types of problems (like car fires and theft), depending on the coverage types you buy.
If you want coverage for mechanical problems, you may be able to buy optional car repair insurance, commonly known as “mechanical breakdown insurance.” This pays for repairs if your car has mechanical or electrical problems. Car repair insurance is similar to an extended car warranty, but the biggest difference is that you purchase it from an insurance company.
What Does Car Repair Insurance Cover?
The items covered by mechanical breakdown insurance depend on the car insurance company but typically include:
- Air conditioning
- Cooling systems
- Electrical systems (including the car’s computer)
- Engine
- Exhaust
- Fuel systems
- Steering components
- Transmission
Generally, you’ll have to pay a deductible if you make a claim under mechanical breakdown insurance. For example, if you have a $250 deductible and your car repair insurance claim is $1,000, your car insurance company will pay $750.
What Is Not Covered By Car Repair Insurance?
The list of items and damages not covered by mechanical breakdown insurance will vary by car insurance company but it generally does not cover:
- Damage caused in a car accident
- Routine maintenance, like engine tune-ups, oil changes, suspension alignment, tire rotation and wheel balancing
- Damage caused by poor maintenance, like infrequent oil changes or using the wrong type of fuel
- Normal wear and tear, like worn brake pads and tires
- Non-mechanical items, like vehicle trim and molding
- Parts or items covered by your car warranty
- Parts or items covered by a recall
- Parts or items covered by a voluntary manufacturer repair program
- Pre-existing damage before you bought the insurance
- Corrosion and rust
Is My Vehicle Eligible For Car Repair Insurance?
Eligibility to buy mechanical breakdown insurance generally depends on vehicle.age and mileage.
For example, we looked at a National General Insurance policy that offered mechanical breakdown insurance for cars in the current model year and seven years prior with an odometer reading less than 72,001 miles. But there was a catch: When it’s time to renew the policy, if your car is over 72,001 miles or projected to be over that mileage amount, mechanical breakdown insurance will be removed from the policy.
The National General Insurance policy has another interesting mileage rule: If your odometer reading exceeds 90,000 miles during the policy term, you won’t be covered for any subsequent losses and mechanical breakdown insurance will be removed from the policy. For example, if you purchase mechanical breakdown insurance for a car with 65,000 miles and rack up another 25,000 miles during the policy term, you’ll lose car repair coverage when you surpass 90,000 miles.
Your car insurance company might have some other eligibility requirements. For example, the National General Insurance policy we reviewed requires you to have comprehensive car coverage to be eligible for car repair coverage.
Certain types of cars may be excluded from mechanical breakdown insurance. Your car insurance company will have a list of vehicles that are eligible or excluded from coverage.
Here are some insurers that offer car repair insurance:
Related: Best Car Insurance Companies 2022
Car Repair Insurance vs. Extended Warranties
You don’t necessarily need special auto insurance in order to get reimbursement for mechanical and electrical repairs. Car warranties are similar. Warranties and car repair insurance both cover mechanical defects in the engine, transmission and electronics, including a car’s computer. The exact specifics of what’s covered will vary depending on the warranty or car repair insurance policy.
Warranties can generally be broken down as:
- New car warranty, which is typically included when you buy a new car. This type of warranty usually covers a range of years or miles, like a three-year or 36,000 mile warranty. A new car warranty usually expires when you hit one of those milestones, whichever comes first.
- Extended car warranty, which extends the length of a new car warranty or can be purchased to cover a used car. You can typically buy an extended car warranty from an auto dealership or a third-party company.
Here are some key differences between car repair insurance and car warranties:
- Car repair insurance is purchased through a car insurance company.
- Extended car warranties are usually sold through car dealerships, auto clubs and other companies.
- Car repair insurance is typically added to your car insurance bill, which you can pay in monthly, semi-annual or annual installments.
- Extended car warranties are typically paid as a lump sum or rolled into your car loan payments.
How Does Car Repair Insurance Work?
If your car has a problem, like a mechanical defect, you can file a claim with your car repair insurance company. A claims representative will determine if the problem is eligible for coverage. For example, if your car’s electrical system goes haywire because of a defect, you would most likely be covered. If your car’s electrical system goes haywire because you cut the wrong wire while trying to install an aftermarket radio, chances are you won’t be covered.
If your car’s problem is covered by your car repair insurance, you can take it to a shop for repair. Some car repair insurance policies might restrict which shops you can use for repair. Check with your car repair insurance company before you take it to the shop to make sure repair will be covered.
Is Car Repair Insurance Worth It?
Car repair insurance could protect you from an unexpected expense, like paying for a busted air conditioning unit. The potential value might be worth it for you, depending on the cost of what breaks.
For example, fixing a car’s air conditioner could cost anywhere from $100 to $1,000. But other items can be more expensive. A transmission replacement could range from $1,500 to $5,000.
Could you afford to pay out-of-pocket if your car had a major mechanical defect? If not, car repair insurance might be worth it for you if your vehicle is no longer under warranty. Keep in mind, you will have a deductible if you make a claim.
You’ll also want to consider these factors before purchasing a car repair insurance policy:
- Can you choose your own repair shop? Car insurance companies typically require you to take the car to a licensed repair shop, but some companies may restrict which shops you can choose from. It’s a good idea to ask where you can get your car repaired before you buy a policy.
- Does the car repair insurance policy come with any added benefits? Some policies might include extras like roadside assistance, trip interruption coverage and rental reimbursement coverage.
- Can you transfer the coverage to a new owner? If you sell or give your car to someone else, some car repair insurance policies allow you to transfer coverage to the new owner.
- Do you already have coverage? You may already have coverage through a new car warranty or an extended warranty. If so, buying car repair insurance would be an unnecessary overlap in coverage.
Car Repair Insurance Alternatives
If car repair insurance is not for you, you’ll still want to be prepared for unexpected vehicle expenses. Here are ways to try to prevent surprise repair bills:
- Research make, model and year. Before you buy a car, research the car’s reliability. For example, you might want to start with Consumer Reports’ reliability guide.
- Do routine maintenance. Keep your vehicle well-maintained based on the car manufacturer’s recommended maintenance schedule.
- Save money toward repairs. Common vehicle repair costs are between $500 and $600, but can go much higher, according to AAA. AAA recommends you set aside at least $50 per month to cover routine maintenance and unexpected repair bills.
- Find a reliable mechanic. If your car needs repair, you’ll want a good mechanic. A good start is finding a shop that specializes in your type of car, reading customer reviews and getting recommendations from friends and family. Ask your mechanic if they have a certification from the National Institute for Automotive Excellence and what type of warranties they give on repair work.
- Check the warranty. If your car is already under warranty, you likely don’t need car repair insurance. Car warranties and car repair insurance are similar, so you don’t need to pay for an overlap in coverage.
Car Repair Insurance At-a-Glance
How Will I Know If My Car Has a Factory Recall?
A recall is issued when a car manufacturer or the National Highway Traffic Safety Administration (NHTSA) determines that a car, car seat, equipment or tire creates a safety risk or fails to meet minimum safety standards.
If your car has an open recall, your car manufacturer will notify you via mail. Make sure you keep your vehicle registration up to date, including your mailing address.
While car repair insurance won’t cover factory recalls, federal law requires the auto manufacturer to fix the problem free of charge. If your dealer or manufacturer refuses to fix the problem, you can file a complaint with NHTSA.
If you didn’t receive a recall notification from your car manufacturer or you want to check if there’s an open recall, check the car manufacturer’s website or Safercar.gov and search by the car’s vehicle identification number (VIN). Your VIN is a 17-digit number that’s etched on the car’s driver-side windshield. It’s also on your vehicle registration or insurance card.
The number of cars on the road with open recalls declined in 2020 from the previous year, according to a recent Carfax report. There were 53 million cars on the road that haven’t been repaired compared to 55.7 million vehicles in 2019. In 2021, minivans and pickup trucks are the most likely cars to have open recalls, according to Carfax data.
“The number of vehicles on the road with open recalls peaked at 63 million in 2017, so we’re heading in the right direction but there’s still a long way to go,” Faisal Hasan, General Manager of Data at Carfax, said in a statement.
Carfax Car Care is a free service that monitors cars for open recalls after owners enter their license plates and VINs. The service will notify you if a recall has been issued. Some Department of Motor Vehicles are providing supplemental recall notifications to car owners during registration, renewal and inspection.
Southern states have the highest percentages of vehicles with open recalls. Mississippi has 26% while Texas and Louisiana have 24% of vehicles with open recalls.
Car Repair Insurance FAQs
Do I need car repair insurance if I already have a car warranty?
If you already have a new car warranty or an extended warranty, you most likely don’t need to buy car repair insurance. While the specifics of what’s covered will depend on your warranty or car repair insurance policy, they generally cover the same items.
How do I know if my car is under warranty?
If you bought a new car, it’s likely to have a new car warranty.
Car warranties typically transfer to new owners, so even if you buy a used car, it might still be under warranty. If you’re not sure if your vehicle is under a warranty, there may be warranty information in the owner’s manual. Or you can contact the dealership where you purchased the car. If you bought the car in a private sale, contact the car manufacturer. You will need your vehicle identification number (VIN), which you can find etched on the driver’s side dashboard, on the driver’s side door jamb or on documents from the car sale.
If your car is not under a manufacturer warranty and no warranty documentation was provided in the sale, it will be more difficult to find out if your car already has an extended warranty through a third-party company. A CarFax report might have information on extended warranty companies as well as the repair/maintenance history.
Does car repair insurance or a car warranty cover car accidents?
Car repair insurance and car warranties do not cover damage from car accidents. Adding collision and comprehensive insurance to your auto insurance policy will cover damage from problems such as car accidents, vandalism, fire, flood, hail, falling objects and collisions with animals. Comprehensive coverage also covers car theft.
If someone else is responsible for a car accident, you can make a claim against their liability insurance, sue them or use your own collision insurance.
Source: https://news.google.com/__i/rss/rd/articles/CBMiQmh0dHBzOi8vd3d3LmZvcmJlcy5jb20vYWR2aXNvci9jYXItaW5zdXJhbmNlL2Nhci1yZXBhaXItaW5zdXJhbmNlL9IBAA?oc=5
