Is Car Repair Insurance Worth the Cost in 2024?

Car repair insurance can be a valuable investment if your current warranty offers limited coverage, your warranty has expired, or you're concerned about the financial burden of out-of-pocket repair costs. The added security might be worth the few extra dollars on top of your policy.

Also called mechanical breakdown insurance, it is an add-on coverage for non-accident related car repairs, focusing on mechanical and electrical components. It differs from comprehensive and collision insurance, which covers accident-related damages, theft or natural disasters.

Car repair insurance, often referred to as mechanical breakdown insurance, is a type of add-on coverage designed to pay for repairs to your car that are not related to an accident. Unlike standard car insurance, which covers damage from collisions or environmental factors, car repair insurance focuses on your vehicle's mechanical and electrical aspects.

Car repair insurance covers repairs for major mechanical parts like engines and transmissions, focusing on non-accident-related breakdowns. In contrast, collision and comprehensive insurance cover accident-related damages and non-collision incidents like theft or natural disasters. Meanwhile, an extended warranty extends the manufacturer's warranty, covering broader issues, including wear and tear, after the original warranty expires.

Car insurance companies typically offer car repair or mechanical breakdown insurance for relatively new vehicles, usually no older than two years. If you plan on driving your car for a long time, consider buying an extended warranty.

Car repair insurance covers essential mechanical parts like the engine and transmission to keep your car running. It doesn't cover routine maintenance, cosmetic updates, normal wear and tear, or damage from misuse or neglect.

This optional coverage does not work retroactively, meaning it won't cover any damages that occurred before you purchased the policy. It only applies to valid damages incurred after the coverage has been bought, providing protection for future incidents but not past ones.

To get car repair or mechanical breakdown insurance, simply contact your insurer and add it to your existing policy.

When you need a repair covered by the policy, you first pay a deductible, after which the insurance company takes over the remaining repair costs. It's important to remember that any repairs needed before you add the coverage aren't covered. Once the repairs are complete, your insurer will reimburse you for the costs or pay the repair shop directly.

Many insurers, like GEICO and Allstate, and third-party companies, like AAA and CarShield, offer car repair insurance. You can add this coverage to your policy for a fee. Depending on the provider, deductibles typically vary from $50 to $500. Third-party providers offer diverse plans catering to different budgets and coverage needs.

Car repair insurance is an excellent choice for individuals with limited warranty coverage, expired warranties or those who own cars with high repair costs.

According to Kelly Blue Book, the cost of repairing a Subaru Forester averages $1,784. In contrast, the Ford F-Series pickup truck, the most sold car in the U.S. in 2023, has a higher average repair cost, amounting to $2,149. These figures highlight the varying repair costs across different vehicle models, emphasizing the potential financial impact of mechanical repairs.

Find answers to some of the most commonly asked questions about car repair insurance, including what it covers, its costs and how it can benefit you.