Paying for Repairs: Does Auto Insurance Cover Mechanical Repairs?

Posted on May 20, 2019
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Buying a new car? 

Trying to save on mechanical repairs?—Whether your car is brand new or used, reliable or unreliable, there is one thing that all cars have in common: Auto insurance.

Auto insurance coverage is just as necessary as the fuel that your car runs on. It's also required by law. There are many different types of coverage that you can add on to your initial policy, but they still may not cover everything.

Sometimes the best auto insurance is simply the assurance of the details of your coverage. Read on to learn more about what traditional car insurance covers and the other options available to help you with the hefty costs of regular auto repairs. 

Does Auto Insurance Cover Mechanical Repairs?

Traditional car insurance protects you from the financial risks of a damaging car accident, whether it be you and your car or someone else and their car—or property. Some car insurance goes as far as to have you covered in the event that your car is vandalized, which means replacing certain items stolen or the car itself. 

Although every car insurance policy is substantially different, they don't typically cover non-accident or regular repairs related to wear and tear and maintenance. However, you do have options if you want to protect your vehicle in the long run.

What Do Car Insurance Policies Actually Cover?

When it comes to choosing the best auto insurance, you'll want to understand what is covered and what is not covered, as well as what is optional. There are quite a few components to car insurance policies but not all are required.

Mandatory Coverage:

  • Bodily Injury Liability: This helps to cover costs associated with injuries and/or death caused by you or whoever you allow to drive your car.
  • Property Damage Liability: This helps to cover costs associated with the damage that you or another driver in your car causes to another vehicle and any property involved in the event of an accident.

Additional Required Coverage:

  • Personal Injury Protection (PIP): This coverage provides reimbursement for medical expenses if you or any of your passengers are injured in an accident. This may also cover lost wages from time off work or other related expenses.
  • Uninsured Motorist Coverage: This coverage will reimburse you for any accidents caused by uninsured motorists or in the event of a hit-and-run. 

There is also an option for Under Uninsured Motorist Coverage which helps to cover costs when another driver does not have sufficient coverage to pay the costs of serious accidents (caused by them, not you).

(The requirements for these components vary depending on the state you live in).

Optional Coverage:

  • Collision Coverage: This coverage will reimburse you for any damage done to your vehicle when you are at fault, whether it be an accident with another vehicle or a tree. This also includes damage done by potholes.
  • Comprehensive Coverage: This provides coverage against theft and vandalism, as well as incidents unrelated to an accident such as a fire, flood, hail, falling objects or other hazards. 
  • Rental Car Insurance: While your car is in the shop being fixed, rental car insurance will help you pay for the cost of a rental car. This may have a limit by the day or dollar amount, depending on your deductible.

Having both collision and comprehensive coverage in your policy is considered "full coverage". If you are leasing or financing your car, there may be a requirement to purchase them when buying auto insurance.  

What About Mechanical Breakdown Insurance?

Mechanical Breakdown Insurance (MBI), also referred to as car repair insurance, can provide extra financial protection if something malfunctions in your vehicle. These mechanical repairs can be something as simple as your AC breaking or as extensive as your engine failing.

This additional insurance policy is meant to cover repairs unrelated to accidents, however, it still won't cover your wear-and-tear maintenance needs like oil changes or new tires.

There are several levels of Mechanical Breakdown Insurance. The basic level of coverage will protect the following:

  • Engine parts
  • Transmission
  • Exhaust
  • Brakes
  • Drivetrain
  • Electrical components 

Other levels of MBI will cover the following in addition:

  • Steering components
  • Fuel system
  • Air conditioning

Typical exclusions from MBI coverage are:

  • Tune-ups
  • Alignment
  • Filters
  • Wheel balancing
  • Oil and transmission fluid changes
  • Coolant and other fluids/lubrication
  • Spark plugs
  • Brake shoes and brake pads
  • Tires 

Older cars may not be eligible for Mechanical Breakdown Insurance. In order to qualify for MBI coverage, most companies like GEICO for example, require that your car be less than 15 months old or have less than 15,000 miles.

Another qualifying factor in MBI coverage is the price of your car. If your car is of extremely high value, you will most likely be denied MBI coverage. This is due to the fact that repairs on cars with a higher value tend to be very expensive, which will result in a loss for the company.

While purchasing MBI in addition to your regular auto insurance coverage can save you a significant amount of money, it is not offered by all auto insurance companies. The companies that do offer MBI coverage will only cover you for up to seven years, or 100,000 miles—whichever comes first. 

MBI Coverage Has Its Limitations

Aside from the specific exclusions in repairs that are covered under Mechanical Breakdown Insurance, there are other limitations to be aware of.

Just like regular car insurance policies, you will be required to take your car to an approved auto repair shop. You are also required to meet a deductible with MBI coverage. MBI deductibles vary and can be as low as $25 or as high as $400.

The lifespan of the average car is about 150,000 miles or eight years. Cars that are well built and well maintained can last up to 300,000 miles. Depending on what you drive and how long you plan to keep your car, seven years (or 100,000) miles can be a small window of time in terms of mechanical repairs. 

Most cars built before 1990 were only able to make it up to 100,000 miles before needing any major mechanical repairs. Most new cars today are built to make it past that amount without breaking a sweat. In other words, while MBI coverage may bring you peace of mind, it may also amount to a giant waste of money.

MBI coverage is more or less a glorified version of a manufacturer's warranty. It does have a broader range of coverage and it usually lasts longer, but it does expire. 

Speaking of the Manufacturer's Warranty

When you buy your car new or even in some cases, pre-owned, a limited-time warranty comes with the contract. Most of the time, you have the option of purchasing an extended warranty or Guaranteed Auto Protection (GAP) Coverage.

Also referred to as an "aftermarket warranty" and in some cases marketed as mechanical breakdown insurance, an extended warranty is just an additional service plan. Just like MBI coverage, a manufacturer's warranty has different levels of coverage from basic to drivetrain to corrosion to bumper-to-bumper. There's a package for every price range. 

These warranty packages also have exclusions:

  • Regular maintenance: Oil changes, tune-ups, etc.
  • Wear and tear items: Tires, bulbs, clutches, brakes and brake pads, etc.
  • Exterior/interior damage: Dents, scratched paint, holes, broken handles, etc.
  • Damaged caused by improper care: Skipped maintenance, reckless driving, etc.
  • Environmental factors: inclement weather, tree sap, sand, wind, salt, etc.
  • Damage caused by accidents

Depending on the year, make and model of your car, the warranties expire at different rates. This why some people opt to purchase MBI coverage in addition to an extended warranty.

Extended warranty plans also require you to pay upfront when purchasing your new car. There is a commission involved, which is why car salesmen will try to pressure you into this additional sales.

Is There Any Type of Coverage for Routine Maintenance?

There is an add-on for every auto insurance policy for every scenario—except routine maintenance and wear-and-tear. 

The routine maintenance that your car will need is relatively inexpensive. Major mechanical repairs such as a blown head gasket can cost up to $1500. But, if you stick to a regular maintenance schedule and take proper care of your car, you won't have to suffer through major mechanical issues down the road.

Your car has an owner's manual equipped with a maintenance schedule for you to follow. If you stick to this schedule, you will avoid a lot of damage as well as unnecessary costs that your mechanic may try to tack on to your bill.

With time, parts will inevitably go bad and need to be replaced. Your best "insurance policy" for this in addition to sticking to a routine maintenance schedule is creating a budget for your car. This way you are able to cover what your insurance company won't when the time comes.

Mechanical Repairs Shouldn't Scare You

Whether you are buying new, used, or leasing—your car is an investment. If you maintain it properly, you will reduce the risk of serious mechanical repairs. 

For more information about buying auto insurance, come visit us. You'll find all the answers you need from auto insurance quotes to the top tips on getting the best deals!

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