These days, we are depending on our cars more than ever, and its important to have reliable transportation to get us where we need to go. If your car has a mechanical breakdown, a standard insurance policy, which typically covers accidents and incidents like fire and theft, likely won’t cover the repairs. This is where car repair insurance can come in handy.

For mechanical problems, there is a coverage available called car repair insurance, more commonly known as “mechanical breakdown insurance” that is used to pay for repairs if your car has mechanical or electrical problems. Car repair insurance is similar to an extended car warranty but is purchased separately and directly from the carrier.

What is car repair insurance?

 Essentially, this coverage is a type of insurance that specifically covers your car’s mechanical and electrical issues. It pays to repair or replace certain systems after the cars’ initial warranty ends.

 What does it cover?

 This coverage covers the internal systems and components of your vehicle. If there is a malfunction of an electrical system, this coverage will pay to replace it. It’s important to note that it doesn’t cover everything. While specific coverages are different for each carrier, here are the most commonly covered systems:

  • Heating and air conditioning
  • Electrical systems, including internal computers and GPS
  • Engine
  • Transmission
  • Exhaust
  • Fuel systems
  • Steering systems

 What does car repair insurance not cover?

 As this coverage is not meant to replace your auto insurance policy, but only to offer additional protection, there are several items and damages that are typically not covered under car repair insurance.

  • Damage caused by an accident
  • Routine maintenance
  • Poor maintenance (infrequent oil changes, using the wrong type of fuel, etc)
  • Normal wear and tear
  • Non-mechanical items (trim, paint, rims, etc)
  • Parts or items covered under the vehicle warranty
  • Parts or items covered by recall
  • Pre-existing damage
  • Corrosion and rust.
  • Repairs covered under your vehicles’ warranty

Car repair insurance vs vehicle warranty

 Before considering car repair insurance, it’s important to know about factory and extended warranties.

Factory warranties

All car manufacturers offer consumers a factory warranty on their new vehicles. This warranty usually includes a new vehicle limited warranty but may also include a powertrain warranty.

A factory or manufacturer’s warranty is the promise an automaker makes to stand by its product cover certain problems with your vehicle that occur within a certain period of time or miles and are not related to general wear and tear.

A powertrain warranty most often lasts for up to 5 years or 60,000 miles (whichever comes first) and typically includes the engine, transmission, and drive components.

Check your auto manual which can tell you what is not covered under your car’s warranty.

Differences between car repair insurance and warranties

Vehicle warranties are typically sold through car dealerships, auto clubs and other companies, where car repair insurance is sold through the insurer directly. You must file a claim to repair damages using car repair insurance, but you do not need to file a claim for repairs under a warranty. Repairs using car repair insurance require a deductible, unlike repairs under warranty which do not require an out-of-pocket payment. Car repair insurance is usually only available for new cars, whereas warranties can be purchased for used or older cars.

 Is car repair insurance worth it?

 For some drivers, it may be worth it. However, most of the covered repairs on a new vehicle will already be covered under the manufacturer’s warranty, and therefore excluded from the car repair insurance policy.

If your vehicle is not covered under a manufacturers or extended warranty, car repair insurance could protect you from unexpected expenses. The cost of replacing a transmission can range from $1,500 to $5,000. If you aren’t able to afford to pay out of pocket for a major mechanical defect, car repair insurance might be your best bet, especially if your vehicle is no longer under warranty. Just remember that you are responsible for the deductible if you make a claim.

If you are thinking of purchasing car repair insurance, here are some factors to consider when shopping:

  • Can you choose your own repair facility? Some companies may restrict the shops you are able to choose from. It might be a good idea to ask if there are shop restrictions before you purchase your policy.
  • Are there added benefits, such as roadside assistance or rental coverage?
  • Is the coverage transferable? If you sell or gift your vehicle, would the policy allow you to transfer coverage to the new owner?

 Alternatives to car repair insurance

 Car repair insurance may not be for every vehicle, but there are ways you can prevent surprise repair costs.

  • Do your research. When shopping for a new vehicle, keep “reliability” at the top of your “Must Haves” list.
  • Keep up with routine maintenance. Not only does routine maintenance help prevent unexpected trips to the mechanic, it also saves you by helping improve fuel efficiency!
  • Check your warranty. If your vehicle is already under warranty, you most likely don’t need car repair insurance.
  • Find a trusted mechanic. If you don’t already have one, ask someone you trust for a recommendation, so you have someone you can count on when repairs and maintenance are needed.
  • Check with your carrier. Many carriers offer access to resources that can help. Customers with Elephant policies can access YourMechanic, a service that makes house calls to your home or office, seven days a week, and offer 600 repair, maintenance, and diagnostic services at a discounted rate.

Another way to save money on maintaining your car? Getting affordable car insurance that will protect you in a pinch. Get a quote with Elephant today to see how we can help you save on your premiums.

Article last updated on June 25th, 2023 at 6:43 pm

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