Is Car Repair Insurance Worth It? Find Out.

Your car’s insurance policy, while being a protective armour, might not wield its shield against mechanical tribulations. When confronted with a blown gasket or a frazzled electrical system, you’ll soon realise that your conventional car insurance is like a sturdy fortress that guards only against the onslaught of accidents and other road calamities, such as car fires and theft. It stands as a steadfast bulwark against these adversities, but when it comes to the intricate innards of your vehicle, you may find your fortress lacking.


However, fret not, for there exists a saviour in the form of optional car repair insurance, often referred to as “mechanical breakdown insurance.” This unique shield is designed to cushion the blow when your car’s mechanical or electrical components start playing truant. Unlike an extended car warranty, mechanical breakdown insurance is an offering from the realm of insurance companies.

What Does Car Repair Insurance Cover?

Mechanical breakdown insurance’s protective cloak varies depending on the insurance provider. Still, in general, it encompasses an array of essential components that keep your vehicle purring smoothly. These often include:


Air conditioning
Cooling systems
Electrical systems (including the car’s intricate computer)
Fuel systems
Steering components


It’s important to note that, in most cases, you’ll need to contribute a deductible when invoking your mechanical breakdown insurance. For instance, if your deductible is set at $250, and your car repair insurance claim amounts to $1,000, your insurance provider will chip in with a commendable $750.

What Is Not Covered By Car Repair Insurance?

While the protective veil of mechanical breakdown insurance is extensive, it does have its limitations. It generally steers clear of the following:


Damage stemming from a car accident
Routine maintenance duties like engine tune-ups, oil changes, suspension alignment, tire rotations, and wheel balancing
Harm caused by negligent maintenance practices, such as infrequent oil changes or using the wrong type of fuel
The inevitable wear and tear of components like brake pads and tires
Non-mechanical elements like vehicle trim and molding
Components or items already covered by your car’s warranty
Items or components addressed in a recall
Components or items under the purview of a voluntary manufacturer repair program
Damage pre-existing before your insurance coverage came into play
The relentless corrosion and rust that can plague your vehicle


Is My Vehicle Eligible For Car Repair Insurance?

The gates to the kingdom of mechanical breakdown insurance eligibility are guarded by two stalwart sentinels: your vehicle’s age and mileage. For instance, let’s consider a policy from National General Insurance. This policy extends its protective wings to cars from the current model year and those from the past seven years, with an odometer reading below 72,001 miles. However, there’s a twist in this tale. When the time comes to renew your policy, if your car’s mileage surpasses 72,001 miles or is projected to exceed that limit, the mechanical breakdown insurance will be cast aside like a forgotten relic.


National General Insurance has another mileage-related rule. If, during the policy term, your odometer reading breaches the 90,000-mile mark, you’ll find yourself bereft of coverage for subsequent losses, and mechanical breakdown insurance will bid adieu. For example, if you purchase mechanical breakdown insurance for a car with 65,000 miles and manage to accumulate another 25,000 miles during the policy term, you’ll lose car repair coverage as soon as you eclipse the 90,000-mile milestone.


It’s important to note that your car insurance company may have its own set of eligibility criteria, such as requiring comprehensive car coverage to qualify for car repair coverage. Additionally, certain types of vehicles may be excluded from mechanical breakdown insurance, with insurance providers maintaining a list of eligible and excluded vehicles.

Car Repair Insurance Providers

If the prospect of car repair insurance piques your interest, you’ll be pleased to know that several insurers offer this type of coverage. Here are a few notable names:


Allstate Vehicle Service Contract
Geico Mechanical Breakdown Insurance
Mercury Mechanical Protection


Car Repair Insurance vs. Extended Warranties

Car repair insurance isn’t the only avenue to safeguard your vehicle against mechanical and electrical woes. Car warranties, akin to trusty shields, offer a comparable defence. Both warranties and car repair insurance shield against defects lurking in the engine, transmission, and electronics, which encompass the intricate realm of a car’s computer. However, the specifics of what’s covered may vary depending on the warranty or car repair insurance policy.


Warranties can typically be categorised into two:

1. New car warranty: Often bundled with the purchase of a new car, this warranty spans a specific number of years or miles, such as a three-year or 36,000-mile warranty. It usually expires upon reaching either milestone, whichever comes first.


2. Extended car warranty: This extension of the new car warranty is available for both new and used cars. You can usually procure an extended car warranty from an auto dealership or a third-party company.


Key distinctions between car repair insurance and car warranties include the following:

Car repair insurance is procured through a car insurance company.
Extended car warranties are typically offered by car dealerships, auto clubs, and other entities.
Car repair insurance often features flexible payment options, allowing you to pay in monthly, semi-annual, or annual instalments.
Extended car warranties are typically paid as a lump sum or rolled into your car loan payments.


How Does Car Repair Insurance Work?

When your car encounters a mechanical snag, much like a knight in shining armor, you can invoke your car repair insurance. A representative of the insurance company will don their metaphorical armor to scrutinize the problem’s eligibility for coverage. If, for instance, your car’s electrical system goes haywire due to a defect, you’ll likely find your shield of car repair insurance offering protection. However, if the chaos in your car’s electrical system resulted from your own misguided attempts at installing an aftermarket radio, you may find your fortress breached, and coverage denied.


If your car’s predicament falls within the protective cocoon of your car repair insurance, you can take it to a designated repair shop. Some car repair insurance policies might restrict your choice of repair shops, so it’s prudent to consult with your insurance provider before making the journey to ensure that the repairs will indeed be covered.


Is Car Repair Insurance Worth It?

The question of whether car repair insurance merits your investment hinges on your financial readiness to weather unexpected expenses in the automotive realm. For instance, if faced with the need to mend a beleaguered air conditioning unit, you might find the investment worthwhile. The value proposition becomes clearer when you consider the cost of potential breakdowns. Repairing a car’s air conditioner could range from a manageable $100 to a more substantial $1,000. However, other vehicular ailments can be far more financially demanding. A transmission replacement, for instance, can soar from $1,500 to a lofty $5,000.


Consider whether you have the financial fortitude to bear such burdens out-of-pocket. If not, car repair insurance might emerge as a sturdy shield, particularly if your vehicle no longer enjoys the sanctuary of a manufacturer’s warranty. Keep in mind, though, that you’ll still have to contend with a deductible when filing a claim.

Before taking the plunge into the realm of car repair insurance, take the following factors into account:


Choice of Repair Shop: Ascertain whether you can choose your preferred repair shop. Car insurance companies often stipulate that you must entrust your vehicle to a licensed repair facility. Knowing where you can have your car repaired is a prudent step before acquiring a policy.
Additional Benefits: Explore whether the car repair insurance policy extends beyond repairs. Some policies may include extras like roadside assistance, trip interruption coverage, and rental reimbursement.
Transferability: Consider whether the coverage can be transferred to a new owner if you decide to part ways with your vehicle. This can be a valuable feature when selling or gifting your car to someone else.
Existing Coverage: Evaluate whether you already possess coverage through a new car warranty or an extended warranty. Redundant coverage can lead to unnecessary expenses, so be mindful of existing safeguards.


Car Repair Insurance Alternatives

If the prospect of car repair insurance doesn’t align with your automotive strategy, you can still navigate the road of vehicular unpredictability with these alternatives:


Thorough Research: Prior to purchasing a car, delve into the vehicle’s reliability history. Resources like Consumer Reports’ reliability guide can provide valuable insights.
Routine Maintenance: Adhere to the recommended maintenance schedule prescribed by your car manufacturer to stave off potential issues.
Financial Preparedness: Be proactive by saving money earmarked for repairs. AAA suggests setting aside at least $50 per month to cover routine maintenance and unforeseen repair expenses.
Seek Reliable Mechanics: In the event of necessary repairs, enlist the services of a trusted mechanic. Start by identifying a shop that specialises in your car’s make and model, read customer reviews, and seek recommendations from acquaintances. Verify whether your chosen mechanic holds certification from the National Institute for Automotive Excellence and inquire about warranties on repair work.
Examine Existing Warranty: If your car still enjoys the embrace of a manufacturer’s warranty, there may be no need for car repair insurance. As warranties and car repair insurance overlap in coverage, careful consideration can prevent duplicity.

How Will I Know If My Car Has a Factory Recall?


A factory recall takes centre stage when a car manufacturer or the National Highway Traffic Safety Administration (NHTSA) determines that a car, car seat, equipment, or tire poses a safety hazard or fails to meet the minimum safety standards.


Should your car find itself entangled in an open recall, your car’s manufacturer will dispatch a notification via mail. It is imperative that you maintain up-to-date vehicle registration records, including your mailing address.


While car repair insurance remains indifferent to factory recalls, federal law mandates auto manufacturers to rectify these issues without cost to the vehicle owner. In the event that your dealer or manufacturer declines to address the problem, you possess the right to file a complaint with the NHTSA.


If you haven’t received a recall notification from your car’s manufacturer or wish to proactively verify the recall status, you can explore the manufacturer’s website or consult the NHTSA. You can initiate the search by utilizing your car’s vehicle identification number (VIN), a 17-digit code etched onto your car’s driver-side windshield. It is also documented on your vehicle registration and insurance card.


As of recent statistics, the number of cars embroiled in open recalls showed a decline in 2020 compared to the previous year. However, millions of vehicles still bore the burden of unrepaired issues. Minivans and pickup trucks, in particular, were more likely to harbor open recalls.


Carfax Car Care offers a free service that diligently monitors cars for open recalls. This service springs into action once vehicle owners input their license plates and VINs. It ensures you remain informed should a recall be issued. Additionally, some Department of Motor Vehicles (DMV) offices are actively assisting car owners by providing supplementary recall notifications during registration, renewal, and inspection processes.


Southern states in the United States have reported higher percentages of vehicles grappling with open recalls. Mississippi takes the lead with 26%, while Texas and Louisiana closely follow with 24% of vehicles afflicted by unresolved recall issues.


In conclusion, navigating the labyrinthine landscape of car insurance and repair coverage can be perplexing, but understanding your options can help you make informed decisions. Car repair insurance, warranties, and prudent maintenance practices all play a role in safeguarding your automotive investment. Moreover, staying vigilant about recalls can ensure your safety on the road.

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