No matter how reliable and dependable cars are, they will eventually break down as their parts or components are at risk to failures. There can be no guarantee that how long each part will last since their lifespans can vary depending on a lot of factors. This is where car repair insurance comes in handy.
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Dealing with unexpected car problems that require repairs or part replacements can be a headache especially if you are not financially prepared for it. While there is an auto insurance policy that can cover any damages when you get involved in an accident, it does not cover routine repairs or car breakdowns that need major repairs.
A car repair insurance on the other hand can help you pay for your car’s major repairs such as transmission, steering system, engine, or electrical system repairs. It enables you to save a large amount of money on expensive repair bills. However, it does not cover everything and it is not available on every car. To know more about it, continue reading and we’ll discuss everything you need to know!
Car Repair Insurance: Is car repair insurance worth the cost?
49 out of 50 states in the U.S. require all drivers to have active auto insurance. The auto insurance policy is needed so you can legally register and drive your car. It is required to make the driver be liable or responsible in an event of an accident. This policy has an optional comprehensive and collision coverage that can cover your car when accidents happen. Although it can cover the damages of your car in an event of an accident, it does not cover repairs on your car parts that fail or wear out over time.
Cars break down eventually no matter how well you take care of them. While there are some car brands that are more reliable than others, they are still subjected to failures and normal wear and tear. It can be a pain in the head when one of the important components of your car suddenly fails or breaks down. The vital parts of a car can be too expensive to fix and it might cost you an arm and a leg to repair. This is where the car repair insurance comes in. It is its purpose, to cover normal car breakdowns and part failures. These repairs are not generally covered by your standard auto insurance policy.
Car repair insurance or the mechanical breakdown insurance aims to protect drivers from any unexpected expense since car breakdowns and part failures usually occur at any given time. It usually happens when you least expect it. It covers car repairs beyond your factory warranty.
Is car repair insurance worth it? Since it can protect you from unforeseen car repair expenses, its potential value might be worth it depending on what car part needs repair. To determine whether it is worth it or not, you can ask yourself some questions. If one day your car will need a major mechanical repair, will you be able to afford it? If the warranty expires and a main component of your car suddenly breaks down, will you be able to handle the expenses? What are the odds of your car experiencing a mechanical breakdown?
The answers to these questions can help you determine if you need car repair insurance or not. The modern cars are now more reliable and with proper car care and maintenance, it could last for many miles without a problem. But then again, car breakdowns can happen any time. Buying a car repair insurance can be beneficial if your car needs expensive repair especially when your manufacturer warranty has already ended. When you buy one, make sure that you don’t purchase an extended warranty since it might overlap with the car repair insurance.
How much does car repair insurance cost? The answer can vary depending on the age and the model of the car you own but it is usually around $30 to $100 or more per year. When you need to use it, you usually have a deductible. For example, your car repair insurance claim is $1,000, you will have a $250 deductible and your car insurance company will only pay you $750. The deductibles can vary, it can go from $100 up to $400.
To help you get an idea of how car repair insurance works and determine if it is worth the cost, here’s an example. If you have car repair insurance of $75 per year and your plan is for six years, you would have paid $450 for the six-year plan plus the $250 deductible. To make the insurance cost worth it, you would need to have a car breakdown of no lesser than $700 in those six years.
If your car happens to have a system failure, the cost of repairs will usually cost more than $700. For example, an exhaust system replacement can go from $4,210 to $6,360 or a blown transmission can cost between $1,800 and $3,400 to fix and replace. There are also some repairs that cost less like a power steering pump replacement that can cost around $529 to $767 or a radiator fan motor replacement that can cost between $623 and $920.
Car Repair Insurance: What should car repair insurance cover?
Car repair insurance covers your car’s mechanical systems and components. It covers breakdowns that happen outside of a collision and is different from the auto insurance policy. To give an example, you were driving and you accidentally ran into a fence, your insurance company will help you pay for the repairs if you have comprehensive and collision insurance coverage. Now, if your car’s steering system suddenly becomes faulty while driving, your standard car insurance won’t cover its repair but the car repair insurance would.
So what should car repair insurance cover? The answer can vary depending on the insurer but it usually covers these systems:
- Electrical systems
- Heat and air conditioning
- Drive axle components
- Engine components
- Transfer case components
- Transmission components
- Turbocharger/supercharger components
- Exhaust
- Steering system
- Fuel systems
There are some car repair insurance policies that offer bumper to bumper coverage of all the car’s systems and components. It will cover any repairs or replacements but it does not cover car parts that fail because of normal wear and tear like the tires, brake pads, or windshield wiper blades. It won’t also cover the tune ups and the oil changes. Remember that the car repair insurance will not cover repair costs that are covered by the comprehensive and collision coverages.
Car Repair Insurance: What is not covered in car repair insurance?
Car repair insurance policies can vary from insurer to insurer but here is the list of items and damages that are generally not covered by car repair insurance.
- Car routine maintenance such as oil changes, engine tune ups, tire rotation, wheel balancing, and suspension alignment.
- Any damages that are caused in a car accident or collision.
- Like mentioned above, normal wear and tear like worn tires and brake pads are not covered by the car repair insurance.
- Any damages that occur because of poor maintenance such as not following the recommended oil change schedule or using the wrong type of oil or fuel.
- Vehicle trim, molding, rims and other non-mechanical items.
- Any parts or items that are covered by your car warranty.
- Any parts or items that are covered by voluntary manufacturer repair programs.
- Any parts or items that are covered by a recall.
- Any car damages that already exist prior to buying the car repair insurance.
- Corrosion or rust on your car.
Car Repair Insurance: Is my car eligible for car repair insurance?
If you are planning to purchase a car repair insurance, you need to know first if your car is eligible. Insurance companies generally sell car repair insurance if the car meets the certain guidelines. The guidelines are usually with regard to the car’s age and mileage. Sometimes the policy can only be purchased when you are buying or own a relatively new car. The car you own should not have a lot of miles on it. When your car reaches a certain age or mileage, the insurer can also refuse to renew your car repair insurance policy.
Before you purchase a car repair insurance, you also need to consider these factors.
- You might not be able to choose your own repair shop. Most car insurance companies will require you have your car checked and repaired to a licensed repair shop. There are also some insurance companies that might restrict which repair shops you can choose from. It is best that you ask them about this before you proceed to buy a policy.
- Before you buy a car insurance policy, you can ask the insurance companies if they offer any added benefits. There are some car insurance companies that offer added benefits such as the trip interruption coverage, roadside assistance, and rental reimbursement coverage.
- There are instances where you suddenly have to sell your car or give it to someone else. When you think that this can happen within the duration of the car repair insurance plan, you can ask the car insurance company if they allow you to transfer the coverage to the car’s new owner.
- Remember that the car repair insurance can overlap an existing new car warranty or an extended warranty coverage. You need to make sure that your car doesn’t have any existing warranty to avoid an overlap in coverage.
- You also need to consider how long you will be using your car. Since newer cars have lesser tendencies to develop serious problems, you don’t have to purchase a car repair insurance if you don’t have a plan to keep your car for more than a few years.
Car Repair Insurance: Advantages of a car repair insurance.
There are people who think that purchasing car repair insurance is just a waste of money. While it might be true in some cases, it can be very beneficial to many. Here are some of the advantages of car repair insurance.
- Bumper to bumper coverage.
If you choose bumper to bumper coverage, you don’t have to be worried about having to spend a huge amount of money for your car’s major repairs. Keep in mind that when you buy this coverage, make sure that you read and pay close attention to the fine prints since there could be some hidden fees and limited coverage. There might be some restrictions on how much the insurance company pays to the repair shop. It is best that you check and read before signing anything so you will be well aware of the insurance company’s restrictions and limits.
- You won’t be overcharged by the mechanics.
There are instances when you feel like the mechanics seem to be overcharging you for the services or repairs done in your car. There are car repair insurance companies that not only pay the total cost of the repairs, but they also regulate the cost and will inform the customer or the policyholder that the charging of the mechanic is too much.
- You have options.
With the car repair insurance policy, you can buy a policy for your car’s specific systems or parts. You can choose whether you’ll insure your engine, transmission, or your electrical system. You can customize your car repair insurance and cover the parts you are most worried about.
- It’s budget-friendly.
Car repairs that need part replacements can be very expensive. With the car repair insurance, you don’t have to be worried about it since the insurance will have to pay for the expenses. Instead of having to deal with an expensive repair that involves a one-time lump-sum payment, you only have to pay for the insurance with manageable monthly amounts.
Car repair insurance is not that overpriced or expensive. It can give you peace of mind knowing that you don’t have to worry about your car repair bills if it suddenly breaks down. But if you are setting aside money for your car’s major repairs in the future, that could work, too.