What You Need to Know About Auto Repair Insurance

auto repair insuranceHow much do you really know about the condition of your car? One recent survey found that 77% of the cars polled needed repairs or maintenance. That indicates that quite a few drivers on the road may be in for some unforeseen auto repair costs in the near future — and one can only hope those won’t be engine or transmission repairs, since these are the most expensive types of auto repair in the U.S. The best way to protect yourself from these surprise costs is to keep up on preventive maintenance, but sometimes you’ll have a breakdown no matter how attentive you’ve been to your tune-ups. It’s these instances that make a case for auto repair insurance.

What Is Auto Repair Insurance? 

A very basic auto insurance policy won’t cover any damage to your vehicle sustained in an accident, and even collision insurance won’t do you any good if your engine suddenly fails or your water pump starts leaking. Auto repair insurance is the only kind of policy that would cover these situations; it works similarly to a warranty in that it covers parts that fail or wear out over time. Like many health insurance plans, often the insurance company will have agreements with certain auto repair shops where you can take your car to be fixed.

What Is Covered in a Typical Policy? 

You may have heard the term “bumper to bumper” insurance. This kind of auto repair insurance covers the most important components that keep your car in working condition, such as the engine and transmission, drivetrain, electrical system and brakes. However, cosmetic body damage and interior parts are usually not included. Most repair insurance policies are a la carte, meaning that it’s possible for a driver to decide exactly what parts of the car he or she wants protected by the policy.

Who Should Consider Auto Repair Insurance?

Often, people use auto repair insurance to give used cars the same kind of protection they’d get from a warranty on a new vehicle (without the high price tag of a new car). Since used car sales outnumber new car sales about 3.3 to 1, it’s likely you have a car in your household that might benefit from repair insurance. But more generally, auto repair insurance is designed to give car owners peace of mind. Unless your car is at particularly high risk, it’s hard to say whether it’s a better financial decision to faithfully pay your insurance premiums each month or to save on your own for future repair costs. But if you’re the kind of person who’s constantly worrying about getting blindsided by high auto repair prices, then the security and predictability may make it the best decision for you.

Would you prefer to pay a little each month knowing you don’t need to worry about repairs, or are you more likely to take a risk on your repair costs? Share your opinion in the comments.

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