Loan & Insurance

Does car repair insurance worth to have?

You probably bought a basic auto insurance policy when you bought your car, and you might have also received an extended warranty to cover potential mechanical problems. However, what occurs once that warranty expires? After the warranty on your automobile expires, you’re in charge of paying for any additional repairs, which might be costly. Purchasing car repair insurance, commonly referred to as mechanical breakdown insurance, is one option to reduce those costs.

Similar to a vehicle warranty, car repair insurance reduces your financial burden in the event that something goes wrong with your car, like as an engine failure or a blown transmission. However, keep in mind that this kind of insurance does not cover damage sustained in accidents or common wear and tear services like tire replacement and oil changes.

Does car repair insurance worth to have

You should consider your financial situation before purchasing car repair insurance. You might be better off without a car depending on its age, how frequently you drive, and your financial circumstances right now. Let’s investigate car repair insurance to see what it is, what it covers, and who it would be most appropriate for.

Well, in this article, the answers to the following questions will be discussed:

  • What is car repair insurance?
  • How does car repair insurance differ from an extended warranty?
  • What is the difference between standard car insurance and car repair insurance?
  • What companies offer car repair insurance?
  • When should I use car repair insurance and when shouldn’t I?

Now, let’s dive in!

Read more: Different types of car insurance

What is car repair insurance?

You can add car repair insurance, often known as mechanical breakdown insurance, to your current auto insurance policy to assist cover repairs that aren’t caused by accidents. It functions effectively as an auto warranty and can pay for services like replacing brakes, replacing engine parts, or fixing a blown alternator.

However, it’s crucial to keep in mind that not all auto repair insurance policies are made alike – coverage may differ according to the insurer you select. Also, keep in mind that not all insurance companies may offer car repair insurance.

How does car repair insurance differ from an extended warranty?

While it might seem like extended warranties and car repair insurance operate in a similar manner, they actually operate very differently. While a car repair insurance policy offers continuing coverage (again, what is covered can vary) as long as you pay for it, an extended warranty only covers particular types of auto repairs for a set amount of time or up to a certain number of miles.

You should be aware of the coverage before choosing an extended warranty. Remember that these warranties can be expensive, and depending on the kind of future repair you will need, you might still be responsible for paying for it.

Read more: Ways to find good and cheap car insurance

What is the difference between standard car insurance and car repair insurance?

First, car repair insurance is optional, even while conventional auto insurance is mandated by law in most states to financially cover you and your car in the event of an accident, theft, or other damage. Additionally, conventional car insurance only covers damage resulting from accidents, whereas automobile repair insurance also covers mechanical issues unrelated to accidents. You can consider it in this manner.

What companies offer car repair insurance?

Many businesses provide car repair insurance, albeit they could advertise it under a different name. Here are some examples.

  • Geico: Mechanical breakdown insurance
  • AAA: Vehicle protection plan
  • Allstate: Long-term powertrain wrap vehicle service contract

Geico: Mechanical breakdown insurance

For new or leased automobiles with fewer than 15,000 miles on them and a lifespan of fewer than 15 months, Geico offers mechanical breakdown insurance or MBI. For up to seven years or 100,000 miles, whichever comes first, you can renew Geico MBI. After a $250 deductible, Geico’s MBI covers repairs for all the vehicle’s mechanical components (apart from routine maintenance and ordinary wear and tear).

AAA: Vehicle protection plan

After the manufacturing warranty on a vehicle ends, owners are protected against unforeseen repair costs by the AAA Vehicle Protection Plan. For consumers’ needs and finances, AAA offers three protection options (silver, gold, and platinum). All three packages cover various repair services, such as those for the transmission, cooling systems, seals and gaskets, and air conditioning and heating.

Read more: Understanding force-placed insurance and why lenders always get you one?

Allstate: Long-term powertrain wrap vehicle service contract

Users are shielded against out-of-pocket auto repairs by the Allstate Long-Term Powertrain Wrap Vehicle Service, which also covers brakes, electrical, steering, cooling, and drives axles in addition to engines, transmissions, and drive axles. After the deductible is paid, Allstate covers all covered parts and labor completely.

When should I use car repair insurance and when shouldn’t I?

The purchase of car repair insurance has a number of advantages. Knowing that you most likely have coverage for an unforeseen repair can bring you comfort. However, as with any warranties, you’ll want to make sure that you are aware of how the repair procedure will run beforehand, including if you’ll have to pay for the repair upfront and receive reimbursement or whether your service provider will cover the cost.

If you acquire a secondhand car with high mileage or as your car ages, you might want to think about purchasing auto repair insurance.

For a new automobile, though, purchasing auto repair insurance might not make sense. It could be a while before you encounter the kinds of problems that auto repair insurance normally covers (such as engine, gearbox, and mechanical). And if they do, the costs of the repairs would probably be covered by your current new-car warranty. Saving money can be advantageous, at least until the end of your new car warranty, before deciding whether or not to purchase auto repair insurance.

Read more: Understanding car insurance quotes

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In conclusion

Consider whether car repair insurance is a good bargain for you now that you are more aware of what it is. If so, find out if your existing insurance provider offers car repair insurance or a comparable product. Ask for an estimate if it does, and make sure to include a thorough list of the repairs that will be covered in the quote. When it comes to their motor insurance products, car insurance firms often offer comparable coverage. However, the limits of their auto insurance repairs can change.

Always remember to compare prices and coverage to find the best deal for your needs. You are not required to use the car repair insurance that your insurance provider offers just because it exists. There are other options if you don’t think car repair insurance is worthwhile. Before your factory warranty expires, you may want to think about purchasing an extended warranty from the automaker or another party. Make sure to compare prices, just like you would with insurance for auto repairs.

Read more: Top 10 best extended car warranty companies

That is all for this article, where the following questions are being answered:

  • What is car repair insurance?
  • How does car repair insurance differ from an extended warranty?
  • What is the difference between standard car insurance and car repair insurance?
  • What companies offer car repair insurance?
  • When should I use car repair insurance and when shouldn’t I?

I hope you learn a lot from the reading, if so, kindly share with others. Thanks for reading, see you around!