Const & Coverage
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Car insurance protects you from the financial burden of having to pay for damage to your car, damage to someone else’s car or property, or the medical expenses of someone you injured with your car. Car insurance covers you when you get into an accident or when your car is damaged by a sudden, expected event like vandalism or a hailstorm.
One thing car insurance doesn’t protect against is the normal wear and tear your car incurs from regular use. That means it won’t pay out to fix your breaks, tune up your engine, change your oil, paint over a scratch, or replace your tires, unless the repair in question was directly caused by a peril covered in your car insurance policy.
It is possible to get a type of car insurance that helps pay some kind of standard repairs. It’s called mechanical breakdown insurance (MBI), also known as car repair insurance; not every insurer offers it, and some that do explicitly reject claims for normal wear and tear. Other carriers offer different insurance products for different types of repairs, such as those specifically designed for paint, fabric, or tires.
Read on to learn more:
Most states require you to have car insurance. In states that require it, you usually only have to purchase a minimum amount of certain components of car insurance, such as liability protection (which covers injuries to people and their property). It’s usually optional to purchase the collision and comprehensive components of car insurance, which are the two types of insurance you’d use for repairs.
Car insurance does not cover regular repairs. But it does cover repairs you need to make as a result of an accident, vandalism, or some kinds of bad weather. If you’re worried about how you’d be able to afford those types of repairs, look into adding collision and comprehensive insurance to your auto insurance policy.
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Collision insurance protects you if your car collides with something other than another moving vehicle. Collision insurance will cover damages to your car and to the property you hit. For example, if you lost control of your car while fiddling with the radio and hit a traffic pole, collision insurance would cover the accident.
Comprehensive insurance covers some damage not relating to a collision, such as damage from falling objects, fire, some natural disasters, and vandalism. It also covers theft, glass damage, and damage from hitting an animal. Comprehensive insurance – also just called comp insurance – will also help pay to replace your car if it gets stolen.
Mechanical breakdown insurance (MBI) is offered by some companies to help pay for regular repairs. It’s not a part of your normal car insurance policy and it’s not required to have in any states. Additionally, older cars may not even be eligible for coverage under MBI; the few companies that do offer MBI, often called car repair insurance, only cover new cars and those below a certain mileage amount.
You may also be able to get MBI as a rider to your regular car insurance policy, which would increase your premiums. (Riders are also known as endorsements.)
Car repair insurance could help pay for new brakes, internal components, or engine parts. It could be used to fix a blown transmission or alternator. As with traditional car insurance, your cost may vary depending on the car and characteristics about you, but purchasing MBI may add hundreds of dollars per year to your usual premiums.
Although not every car insurance company offers mechanical breakdown insurance, you may be able to purchase a la carte coverage for your various repair needs. Some insurers, for example, let you purchase just coverage for paint, tires, or engine repairs. Remember that this is not a replacement for the car insurance you’re typically required to have by law.
You may already have a form of protection for mechanical breakdowns if you purchased a mechanical warranty when you bought your car. Depending on the car, mechanical warranties can be less expensive than MBI, but may have a more limited scope in what kinds of repairs they cover, and they’re limited to a shorter eligibility period.
However, a major advantage that MBI has over an extended warranty is that the latter has to be paid as a lump sum at signing, while the former can be paid in monthly installments. But if you’re looking for this option, your car dealer may offer it as an extended warranty, and you may be able to split the full cost across your financing payments.
Mechanical breakdown insurance providers generally require you to take your car to an approved auto repair shop. If you’re familiar with car insurance, you’ll recognize this common stipulation from your car insurance policy.
Like your traditional car insurance, you’ll also have to meet a deductible, an amount you’re obligated to pay out of pocket on a claim before the insurer picks up the rest of the cost. But MBI deductibles are frequently pretty low, usually no more than $250 to $400. Since the cost of repairing failed components of your engine could reach into the thousands of dollars, even after the deductible your mechanical breakdown insurance could save you hundreds of dollars.
Unlike car insurance, however, mechanical breakdown insurance eventually sunsets as your car ages. That’s because the car is more likely to need repairs as its components accrue usage. Your coverage may end up lasting only a matter of months or miles, depending on the insurer from which you purchase the policy.
Car repair insurance also usually doesn’t include maintenance, and it could have exclusions for repairs as common as replacing the coolant, rebalancing the wheels, and changing the tires. For that reason, make sure you examine the MBI policy as closely as you can before deciding whether it’s right for you and ask your car insurance broker any questions you may have.
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