Prepare for the Worst: What You NEED to Know About Auto Repair Insurance
As a vehicle owner, you understand the importance of investing in insurance that protects you and covers the cost of repairs to your car if you’re involved in an accident.
You’re probably well-prepared for car accidents. But, have you ever thought about how you’ll pay for repairs if your breaks down on the side of the road (something 40 percent of Americans aren’t equipped to handle)?
Many vehicle owners never stop to think about auto repair insurance (sometimes referred to as mechanical breakdown insurance) until it’s too late and their car is already in the shop.
For some people, auto repair insurance is an absolute must. For others, it seems like an unnecessary expense.
Not sure if you should worry about buying auto repair insurance? Read on to learn everything you need to know about it before you make your decision.
What is Auto Repair Insurance?
Auto repair insurance is a type of car insurance that’s not addressed as often as things like collision coverage and liability insurance.
Auto repair insurance pays for the cost of car repairs that are unrelated to an accident. It specifically covers the cost of repairs that are outside of the manufacturer’s warranty.
Pros of Auto Repair Insurance
There are many benefits that come with investing in auto repair insurance. Some of the greatest benefits include the following:
Avoid Paying More than You Should
If you’re paying out of pocket to a mechanic, some less-than-trustworthy individuals may attempt to take advantage of you and charge you more than is reasonable.
When you have auto repair insurance, the insurance company regulates the cost of your repairs. This means they will be able to tell if a mechanic is charging more than they should for their services.
This helps you avoid getting ripped off, and you don’t have to foot the bill for the repairs — it’s a win-win.
Good Alternative to an Extended Warranty
When you’re purchasing a car, the dealer may try to convince you to purchase an extended warranty.
In many cases, though, it’s a better option to invest in auto repair insurance instead. Auto repair insurance acts in a similar way, but it never runs out, unlike a warranty, extended or otherwise.
Auto repair insurance is also a good alternative for individuals who are buying a used vehicle and don’t have access to an extended warranty.
Lots of Options
When you purchase auto repair insurance, you have access to a variety of options. These insurance policies work on an a la carte basis, so you only pay for what you want.
For example, you can purchase insurance to cover specific systems, like the transmission or the brakes. These are systems that expensive to repair should something go wrong.
Easier Budgeting
It’s no secret that auto repairs are expensive. And, unexpected breakdowns can easily wreak havoc on a household budget, especially in a world where most people don’t have any emergency savings.
Auto repair insurance allows you to factor potential breakdowns into your monthly budget with a manageable monthly or yearly premium.
Peace of Mind
Finally, you can’t beat the peace of mind that comes with knowing you will be covered if your car breaks down.
Breakdowns are scary and auto repairs are stressful, but auto repair insurance can help you to feel more at ease and confident behind the wheel.
Cons of Auto Repair Insurance
Of course, there are some downsides to auto repair insurance, too. There are a few reasons why you might not want to purchase this insurance, including the following:
Full Coverage Can be Expensive
Because auto repair insurance is sold on an a la carte basis, it can be expensive to cover all the systems of your car.
If this is something you want, you may find that you’re adding a lot of extra expenses to your monthly budget.
Most drivers already pay more than they’d like for insurance and don’t necessarily want to increase their monthly premiums anymore.
Difficult Claims Handling
Sometimes, it can be frustrating to try and get the insurance company to handle your claim and pay for the cost of the repairs to your car.
As with any type of insurance, some agents will make you wait a long time or make you jump through a lot of hoops before they’ll agree to pay out.
Choosing a Good Insurance Policy
If you’re leaning toward investing in auto repair insurance, it’s important to make sure you’re purchasing a good policy that will give you the coverage you need.
From your family friend to publications like this useful resource, there are a lot of different sources that can help you choose between different types of insurance policies.
If you’re still feeling overwhelmed by the decision, start by asking these questions when you’re trying to make a decision about a specific policy:
- What does the coverage include and exclude?
- What is the deductible?
- How is the deductible applied?
- What is the process of making a claim and getting compensated?
- Can I transfer the coverage if I sell the car?
- How much money needs to be paid upfront?
- How do you define wear and tear?
- Do I get to choose the mechanic I use?
- How long can I renew my coverage?
If you find an insurance provider that gives satisfactory answers to all of these questions, they’re likely a good option for you.
Get More Insurance Help Today
As you can see, there’s a lot to take into account when you’re trying to decide whether or not to invest in auto repair insurance.
This insurance does add some extra expenses to your monthly budget, but it can also save you a lot of money later on and give you peace of mind right now.
After reading through the pros and cons, where do you stand? Is this something you’d like to purchase?
Or, are you still looking for more information on auto insurance in general?
If you want to learn more, there are lots of articles on our site that you can consult.
This buyers guide is a great starting point to help you determine what kind of auto insurance you need.