Unexpected car troubles can be a major headache, especially when they come with hefty repair bills. Sometimes these repairs can run into thousands of dollars, putting a strain on your finances. At Car Repair Online, we understand these concerns, and that’s why we’ve put together this comprehensive guide to auto repair insurance. We’ll break down everything you need to know about this coverage, also known as mechanical breakdown insurance (MBI), including what it covers, how much it costs, and whether it’s a smart investment for you. We’ll also point you in the direction of reputable car insurance providers if you decide auto repair insurance is right for you.
Key Takeaways
- Auto repair insurance, or mechanical breakdown insurance, is designed to cover significant car repairs, focusing on vital systems like the drivetrain, engine, and transmission.
- It offers similar protection to an extended car warranty but is typically geared towards newer vehicles with lower mileage.
- Adding this optional coverage to your car insurance policy is generally quite affordable, averaging around $100 annually.
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What Is Auto Repair Insurance?
Auto repair insurance, frequently referred to as mechanical breakdown insurance (MBI), is an optional addition to your car insurance policy that helps cover the costs of repairing your vehicle when it experiences mechanical failures. Think of it as a safety net for your car’s essential systems. Mechanical breakdown insurance provides valuable peace of mind, ensuring you’re not left footing the entire bill when major components like your engine or transmission need repair or replacement due to unexpected breakdowns.
Typically, auto repair insurance is offered for newer vehicles that haven’t accumulated excessive mileage. To be eligible, cars are often required to be less than 15 months old and have fewer than 15,000 miles on the odometer. So, if you’ve recently purchased a new or nearly new car and haven’t opted for an extended warranty, exploring auto repair insurance could be a wise move.
If you already have an extended car warranty, you likely won’t need auto repair insurance, as these two types of protection serve similar purposes. The main distinctions lie in eligibility criteria, coverage limits, and price. Mechanical breakdown insurance generally comes with a lower price tag than an extended car warranty but is usually limited to newer cars and may offer slightly less comprehensive coverage overall.
How Does Car Repair Insurance Work?
Like other forms of car insurance coverage, auto repair insurance acts as an added layer of financial protection that activates when you need it most. Similar to many insurance policies, it typically involves a deductible, which is the amount you pay out-of-pocket before your insurance coverage kicks in.
You can usually add car repair insurance to your existing car insurance policy if your current insurer offers it. Alternatively, some companies, like Progressive, may offer it as a standalone product.
Here’s a simple breakdown of how car repair insurance operates:
- You purchase auto repair insurance and choose your deductible amount, for instance, $250.
- A year later, your car experiences a major breakdown, and your mechanic determines that the transmission needs replacing, with an estimated cost of $8,000.
- You file a claim with your auto repair insurance provider, pay your $250 deductible, and your insurance covers the remaining $7,750 to handle the transmission repairs.
Because auto repair insurance is generally quite affordable, often costing around $100 per year on average, it presents a significant potential for savings when unexpected repairs arise. Unless you have a substantial emergency fund readily available, auto repair insurance provides assurance that you won’t have to incur significant debt to manage costly vehicle repairs.
Car Repair Insurance vs. Extended Warranty
Auto repair insurance shares similarities with an extended warranty for your vehicle but differs in several key aspects, including vehicle eligibility, coverage limits, and overall cost.
| Vehicle Eligibility | Car repair insurance typically restricts eligibility to vehicles under 15 months old with fewer than 15,000 miles. Extended car warranties, on the other hand, can be purchased for older, higher-mileage vehicles, sometimes up to 300,000 miles. |
|---|---|
| Coverage Limits | Auto repair insurance policies often provide longer coverage periods compared to standard warranties. For example, Geico’s mechanical breakdown insurance can cover vehicles for up to 7 years or 100,000 miles. In contrast, extended warranties from car manufacturers commonly have limits around 6 years or 75,000 miles. |
| Cost | The cost of both types of coverage is influenced by various factors. However, a seven-year auto repair insurance plan might cost approximately $100 per year, totaling $700 over the policy’s duration. Research indicates that the median cost for a three-year extended car warranty is significantly higher, around $2,458. |
Another key difference between auto repair insurance and extended car warranties is where you purchase them. Auto insurance companies are the primary providers of auto repair insurance. Extended car warranties are typically sold by car dealerships, often at the time of vehicle purchase or as the original manufacturer’s warranty nears expiration. However, car owners can usually purchase an extended warranty from a dealer at almost any point.
What Does Auto Repair Insurance Cover?
Auto repair insurance is designed to cover major mechanical breakdowns that can occur in vehicles. It provides coverage for significant mechanical failures or malfunctions affecting a car’s core systems, including:
- Air conditioning and heating systems
- Drive axle
- Emissions system
- Engine
- Exhaust system
- Steering system
- Suspension
- Transmission
It’s important to note that this coverage applies only to breakdowns that are not the result of an accident or collision. If any of these components are damaged in an accident, you would typically file a claim under your collision coverage instead.
What Does Auto Repair Insurance Not Cover?
Auto repair insurance does not extend to routine maintenance or regular upkeep. It won’t cover services considered part of standard vehicle maintenance necessary to keep your car running smoothly, such as oil changes or tire rotations and replacements.
Specifically, auto repair insurance typically excludes coverage for:
- Adding fluids (oil, coolant, etc.)
- Replacing brake pads
- Replacing filters (air filter, oil filter, cabin filter)
- Replacing or rotating tires
- Replacing spark plugs
Furthermore, auto repair insurance generally does not include roadside assistance or towing services. These services are usually covered under emergency road service (ERS) coverage, which can be added to your standard car insurance policy.
How Much Does Auto Repair Insurance Cost?
The cost of auto repair insurance policies can vary, ranging from as low as $30 to as much as $100 per year. However, when budgeting for this type of insurance, you should anticipate paying an average of approximately $100 annually, or around $700 for the entire duration of a typical seven-year policy.
The primary factor influencing the policy’s cost is the deductible amount you choose. Most insurance providers offer a range of deductible options, usually between $100 and $500. Selecting a higher deductible generally results in a lower monthly or annual premium.
Is Auto Repair Insurance Worth It?
Deciding whether auto repair insurance is a worthwhile investment ultimately depends on your personal financial situation, the type of vehicle you own, and your individual risk tolerance. When considering this coverage, here are some key factors to evaluate:
Assess Your Financial Situation
First, consider whether you have the financial capacity to cover a major car repair expense out of pocket without resorting to debt. Second, determine if you can comfortably afford the additional monthly premium for the peace of mind that auto repair insurance provides. If you can manage the insurance premiums but would struggle to pay for a significant repair bill, then this type of policy might be a valuable option for you.
Consider Your Risk Tolerance
It’s important to acknowledge that there’s always a chance you may never need to use auto repair insurance. Newer vehicles and brands known for reliability tend to be less prone to breakdowns, especially in their early years. However, if you prioritize the security of knowing you’re protected against unexpected mechanical issues and breakdowns, even for a relatively small monthly cost, then auto repair insurance could be a worthwhile investment for you.
Evaluate Your Vehicle’s Reliability
While modern vehicles are generally more reliable than older models, mechanical failures can still occur. Certain makes and models may also have a higher likelihood of specific types of mechanical problems. Researching the reliability ratings and common issues associated with your particular vehicle can help you make a more informed decision about whether this coverage is a prudent choice.
Car Reliability and Repair Costs
Resources like RepairPal offer reliability ratings and repair cost estimates for various vehicle makes and models. According to RepairPal data, here are some of the most reliable car brands on the market:
| Brand | Reliability Rating | Average Repair Cost |
|---|---|---|
| Honda | 4 out of 5 | $428 |
| Acura | 4 out of 5 | $501 |
| Kia | 4 out of 5 | $474 |
| Hyundai | 4 out of 5 | $468 |
| Mazda | 4 out of 5 | $462 |
| Lexus | 4 out of 5 | $551 |
| Toyota | 4 out of 5 | $441 |
| Nissan | 4 out of 5 | $500 |
Auto Repair Insurance: FAQ
Below are answers to some frequently asked questions about auto repair insurance.
What is auto repair insurance?
Auto repair insurance, most commonly known as mechanical breakdown insurance (MBI), is an optional car insurance coverage that helps pay for vehicle repairs due to mechanical breakdowns. MBI covers the cost of repairing major mechanical components, such as the engine and transmission, when the damage isn’t caused by an accident. Accident-related mechanical repairs are typically covered by collision insurance.
Does auto repair insurance cover towing?
Typically, auto repair insurance itself does not cover towing services. Towing and roadside assistance are usually separate coverages, often available as emergency road service (ERS) on your car insurance policy. The average cost for a tow truck can be around $109, but this can vary based on factors like time of day, distance towed, and the type of tow truck needed.
How much does auto repair insurance cost per year?
Auto repair insurance costs can range from $30 to $100 annually. The average yearly cost is generally around $100. Your deductible choice will influence the premium, with higher deductibles typically leading to lower annual costs.
Our Methodology:
Car Insurance Methodology
To ensure our readers receive unbiased and accurate information, Car Repair Online employs a rigorous rating system to evaluate car insurance companies. We gather data on numerous auto insurance providers, assessing them across a wide array of factors. This comprehensive evaluation results in an overall rating for each company, with top-scoring insurers ranking highest in our lists.
The key factors considered in our ratings include:
- Coverage (30% of total score): Insurers offering a broad spectrum of coverage options are favored, as they are more likely to meet diverse consumer needs.
- Cost and Discounts (25% of total score): We analyze auto insurance rate estimates provided by Quadrant Information Services and consider available discount opportunities.
- Industry Standing (20% of total score): Our team assesses market share, ratings from industry experts, and the company’s longevity in the insurance industry.
- Customer Experience (15% of total score): This rating is based on complaint data from the National Association of Insurance Commissioners (NAIC), customer satisfaction ratings from J.D. Power, and our own shopper analysis of customer service responsiveness and helpfulness.
- Availability (10% of total score): Companies with wider state availability and less restrictive eligibility criteria receive higher scores in this category.
Our Credentials:
- 800+ hours of dedicated research
- 130+ companies thoroughly reviewed
- 8,500+ consumers surveyed to gather insights
*Data accurate as of the publication date.
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