Does Auto Insurance Cover Repairs: Everything You Need to Know

John Voelcker
·5 min read
Photo credit: Justin Sullivan - Getty Images
Photo credit: Justin Sullivan - Getty Images

Does auto insurance cover repairs if your vehicle suffers damage? The answer depends on what type of coverage you have and when the damage occurred.

What Is Car Repair Insurance?

If you need to fix mechanical issues once your vehicle's original warranty expires, you might want to consider purchasing car repair insurance. Also referred to as mechanical breakdown insurance (MBI), this type of insurance is available from major insurers and can save you from paying thousands of dollars in repairs. Note that it's not mandated by any state, nor is it part of your normal auto insurance policy.

Although this type of insurance does not cover the replacement of filters, tires, spark plugs, brake pads, or adding fluids, it does cover the following:

  • Drivetrain

  • Engine

  • Transmission

  • Brakes

  • Exhaust

  • Power system

  • Steering

  • Air conditioning

  • Fuel system

It's similar to service contracts or extended warranties offered from car dealers and manufacturers as it covers the same aspects.

Keep in mind that not all insurers offer this type of coverage, and even if they do, they might have limitations. For instance, you might need this type of coverage when your vehicle is relatively new. According to WalletHub, GEICO only lets you sign up if your vehicle has less than 15,000 miles and is less than 15 months old.

Also, the coverage might end when your vehicle ages. You'll likely need to remove this coverage after 100,000 miles or seven years.

What's the Difference Between MBI and Extended Warranty Coverage?

Although the two types of coverage sound similar, they do have some differences. If you purchased your vehicle new, it might have some time remaining on the original warranty since you can usually transfer the warranty. But if you want to purchase an extended warranty, either from a third-party seller or dealership, that adds continued coverage for specific issues even when the manufacturer's warranty expires.

Depending on the vehicle, extended warranties are cheaper than MBI, but they might be more limited in what types of repairs they cover. They might also have a shorter time frame in which you're eligible. However, just like a regular warranty and policy, an extended warranty won't cover normal wear and tear. Shop around and compare costs, as you might find that MBI offered via your insurer covers more than an extended warranty.

What Are the Limits to MBI?

Before you agree to add an MBI to your policy, make sure you're aware of any limitations you might have to follow.

  • Repairs are done at an approved auto repair shop. MBI providers usually require that you have your vehicle serviced at a specific shop.

  • You still have to pay a deductible. Just like traditional insurance, you must pay a deductible before the insurer picks up the remainder of the cost. According to Policygenius, MBI deductibles are usually low, between $250 to $400. Even if you have to pay the deductible, replacing major components of your vehicle could run thousands of dollars, thus saving you money in the long run.

  • It doesn't include maintenance. MBI could have exclusions for typical repairs, such as replacing the coolant and changing the tires. Make sure you examine the policy thoroughly and ask your agent if you have any questions or concerns.

Does Car Insurance Cover Car Repairs?

If your vehicle was damaged due to a collision or other covered incident, such as a fire or theft, regular car insurance might help offset the cost for repairs. However, repairs for routine mechanical breakdowns as well as normal wear and tear are usually not covered in an insurance policy.

According to the National Association of Insurance Commissioners, vehicle maintenance, including oil changes, is usually not included with your policy. Also, a mechanical failure or blown engine will likely not be covered when it comes to replacing or repairing your vehicle.

Carrying collision coverage can help you pay for repairs if your vehicle is damaged from an accident with an object or another vehicle. This coverage usually protects you if you're involved in a single-vehicle accident or from hitting a pothole. It also helps if your vehicle has mechanical issues or sustains body damage because of the collision.

Another type of coverage is comprehensive insurance that can offset the costs of repairs. This coverage gives you protection from damage caused by the following:

  • Fire

  • Theft

  • Vandalism

  • Natural disasters

  • Falling objects

  • Animal damage

What Alternatives Exist for Car Repair Insurance?

If you're worried about expensive repairs and want extra protection, you should consider purchasing a car warranty as, according to Edmunds, they're designed to help pay for certain mechanical breakdowns. They usually have a set time frame or until your vehicle reaches a specific mileage.

Another choice is roadside assistance. With this program, you might receive towing services if your vehicle breaks down, assistance with a flat tire, and a jump-start for dead batteries. They're usually available through memberships or a need-by-need basis.

Who Pays for Repairs After an Accident?

When determining who pays for repairs after an accident, it comes down to who was responsible. If you're the at-fault driver, your insurer will likely cover your repairs after you cover the deductible.

However, if the other driver is at fault, you can file a claim with the other driver's provider. You can also opt to have your insurer pay for your repairs, even if you're not at fault or the other driver isn't responsive or cooperative. In this situation, your insurer pursues compensation from the other driver, including money back for your deductible.

If, for some reason, there's a disagreement as to which driver is responsible for the accident, both insurers can sue each other to recover compensation.

Owning a vehicle comes with plenty of responsibility, and odds are, you will have to pay for repairs at some point. Purchasing car repair insurance is one way to help offset the costs that come with replacing major components of your vehicle. However, sometimes buying extended warranty coverage is the better option, so make sure you shop around and compare costs.

Check this out if you need additional information, resources, or guidance on car insurance.

Sources:

https://www.caranddriver.com/car-insurance/

https://wallethub.com/edu/ci/car-repair-insurance/10869

https://www.policygenius.com/auto-insurance/does-car-insurance-cover-regular-repairs/

https://www.edmunds.com/auto-warranty/warranty-and-roadside-assistance-coverage.html

https://www.caranddriver.com/car-insurance/a32500340/what-is-comprehensive-car-insurance/

https://www.naic.org/documents/consumer_guide_auto_booklet.pdf

https://www.caranddriver.com/research/a32878888/extended-warranty-for-car/

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