Is Car Repair Insurance Worth It? – Forbes Advisor

If your car has a mechanical failure, such as a broken gasket or failed electrical system, your auto insurance policy will not cover the cost of repairs. That’s because a standard car insurance policy only covers car accidents and other types of problems (like car fires and thefts), depending on the types of coverage you buy.

If you want coverage for mechanical problems, you can purchase optional auto repair insurance, commonly known as “mechanical breakdown insurance.” this pays for repairs if your car has mechanical or electrical problems. Auto repair insurance is similar to an extended car warranty, but the biggest difference is that it is purchased from an insurance company.

Reading: How much is car repair insurance

what does auto repair insurance cover?

Items covered by mechanical breakdown insurance depend on the auto insurance company, but generally include:

  • air conditioning
  • cooling systems
  • electrical systems (including car computer)
  • engine
  • escape
  • fuel systems
  • address components
  • transmission
  • Generally, you will have to pay a deductible if you file a claim under mechanical breakdown insurance. For example, if you have a $250 deductible and your auto repair insurance claim is $1,000, your auto insurance company will pay $750.

    what does auto repair insurance not cover?

    The list of items and damage not covered by mechanical breakdown insurance will vary by auto insurance company, but generally does not cover:

    • injuries caused in a car accident
    • routine maintenance, such as engine tune-ups, oil changes, suspension alignment, tire rotation, and wheel balancing
    • damage caused by poor maintenance, such as infrequent oil changes or using the wrong type of fuel
    • normal wear and tear, such as worn brake pads and tires
    • non-mechanical items, such as vehicle trim and moldings
    • 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 purchasing the insurance
    • corrosion and rust
    • Is my vehicle eligible for auto repair insurance?

      Eligibility to purchase mechanical breakdown insurance generally depends on the age and mileage of the vehicle.

      For example, we examined a national general insurance policy that offered mechanical breakdown insurance for cars from the current model year and seven years prior with an odometer reading of less than 72,001 miles. But there was a catch: When it’s time to renew your policy, if your car has more than 72,001 miles or is projected to have more than that many miles, the 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 term of the policy, you will not be covered for any subsequent loss and the mechanical breakdown insurance will be removed from your policy. The policy. For example, if you buy mechanical breakdown insurance on a car with 65,000 miles and earn another 25,000 miles over the term of the policy, you’ll lose auto repair coverage when you go over 90,000 miles.

      Your auto insurance company may have other eligibility requirements. For example, the national umbrella insurance policy we reviewed requires you to have comprehensive auto coverage to be eligible for auto repair coverage.

      See also: What Happened to Betsy Farias Insurance Money? Did Her Daughters Receive It?

      certain types of cars may be excluded from mechanical breakdown insurance. Your auto insurance company will have a list of vehicles that are eligible or excluded from coverage.

      These are some insurers that offer auto repair insurance:

      • allstate vehicle service contract
      • geico mechanical breakdown insurance
      • mercury mechanical protection
      • related: best car insurance companies 2022

        auto repair insurance vs. extended warranties

        You don’t necessarily need special auto insurance to get reimbursed for mechanical and electrical repairs. auto warranties are similar. Auto repair warranties and insurance cover mechanical defects in the engine, transmission, and electronics, including the car’s computer. the exact details of what is covered will vary depending on your warranty or auto repair insurance policy.

        guarantees can generally be broken down as:

        • new car warranty, which is usually included when you buy a new car. This type of warranty typically covers a range of years or miles, such as a three-year or 36,000-mile warranty. a new car warranty usually expires when it reaches 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 usually purchase an extended car warranty from a car dealer or an outside company.
        • Here are some key differences between auto repair insurance and auto warranties:

          • Auto repair insurance is purchased through an auto insurance company.
          • Extended car warranties are usually sold through auto dealers, car clubs, and other companies.
          • Auto repair insurance is usually added to your auto insurance bill, which you can pay in monthly, semi-annual, or annual installments.
          • Extended car warranties are usually paid as a lump sum or included in car loan payments.
          • How does auto repair insurance work?

            If your car has a problem, such as a mechanical defect, you can file a claim with your auto repair insurance company. a claims representative will determine if the problem is eligible for coverage. For example, if your car’s electrical system fails due to a defect, it will most likely be covered. If your car’s electrical system fails because you cut the wrong wire while trying to install an aftermarket radio, it probably isn’t covered.

            If your car problem is covered by your auto repair insurance, you can take it to a shop to have it fixed. Some auto repair insurance policies may restrict which shops you can use for the repair. Check with your auto repair insurance company before taking it to the shop to make sure the repair is covered.

            Is auto repair insurance worth it?

            Auto repair insurance could protect you from an unexpected expense, like paying for a broken air conditioning unit. the potential value may be worth it to you, depending on the cost of what is broken.

            For example, fixing a car air conditioner can cost between $100 and $1,000. but other items may be more expensive. a transmission replacement could range from $1,500 to $5,000.

            See also: Penalties for Driving Without Insurance in Arkansas – ValuePenguin

            Could you pay out of pocket if your car had a major mechanical defect? If not, auto repair insurance might be worth it if your vehicle is no longer under warranty. keep in mind that you will have a deductible if you make a claim.

            You’ll also want to consider these factors before purchasing an auto repair insurance policy:

            • can you choose your own repair shop? Auto insurance companies generally require you to take the car to an authorized repair shop, but some companies may restrict which shops you can choose. It’s a good idea to ask where you can get your car repaired before you buy a policy.
            • Does the auto repair insurance policy include any additional benefits? some policies may include extras like roadside assistance, trip interruption coverage, and rental reimbursement coverage.
            • Can you transfer coverage to a new owner? If you sell or give your car to someone else, some auto 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 extended warranty. if so, buying auto repair insurance would be an unnecessary overlap in coverage.
            • car repair insurance alternatives

              If auto repair insurance isn’t for you, you’ll still want to be prepared for unexpected vehicle expenses. Here are some ways to try to avoid surprise repair bills:

              • Research the make, model, and year. Before you buy a car, research the car’s reliability. For example, you might want to start with the Consumer Reports Reliability Guide.
              • Perform routine maintenance. Keep your vehicle in good condition according to the automaker’s recommended maintenance schedule.
              • Save money on repairs. Common vehicle repair costs range from $500 to $600, but can be much higher, according to AAA. aaa recommends that you set aside at least $50 per month to cover routine maintenance and unexpected repair bills.
              • Find a mechanic you trust. If your car needs repair, you’ll want a good mechanic. A good start is to find a store that specializes in your type of car, read customer reviews, and get recommendations from friends and family. Ask your mechanic if they are certified by the National Institute for Automotive Excellence and what kind of warranties they give on repair work.
              • Check the warranty. If your car is already under warranty, you probably don’t need auto repair insurance. Auto warranties and auto repair insurance are similar, so you don’t have to pay for overlapping coverage.
              • auto repair insurance overview

                How will I know if my car has a factory recall?

                A recall is issued when an automobile manufacturer or the National Highway Traffic Safety Administration (NHTSA) determines that an automobile, 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 by mail. Be sure to keep your vehicle registration up to date, including your mailing address.

                While auto repair insurance doesn’t cover factory recalls, federal law requires the automaker to fix the problem free of charge. If your dealer or manufacturer refuses to fix the problem, you can file a complaint with the NHTSA.

                if you did not receive a recall notification from your car manufacturer or want to check if there is 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 is etched into the windshield on the driver’s side of the car. it’s also on your vehicle registration or insurance card.

                The number of cars on the road with open recalls decreased in 2020 from the previous year, according to a recent report from carfax. There were 53 million cars on the road that weren’t repaired compared to 55.7 million vehicles in 2019. In 2021, minivans and pickup trucks are the cars most likely to have open recalls, according to carfax data. /p>

                “the number of vehicles on the road with open recalls peaked at 63 million in 2017, so we are headed in the right direction, but there is still a long way to go,” faisal hasan, general manager of data at carfax, it said in a statement.

                carfax car care is a free service that monitors cars for open recalls after owners submit their plates and vins. the service will notify you if a withdrawal has been issued. Some motor vehicle departments provide additional 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.

                See also: How Long Does An Insurance Claim Stay On Your Record? – How Long do Car Insurance Claims Stay on Your Record?

                auto repair insurance frequently asked questions

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