Auto Repair Insurance Explained: Costs, Coverage, and Benefits

Auto Repair Insurance: Top 10 Benefits in 2024

Understanding Auto Repair Insurance: Overview and Importance

Auto repair insurance is an essential safeguard against unexpected costs for mechanical and electrical breakdowns in your vehicle. Whether you own a new or used car, this type of insurance can provide financial protection, filling in the gaps left by standard car insurance and warranties.

Key Points:

  • Overview: Auto repair insurance covers costs related to mechanical and electrical failures.
  • Importance: Helps avoid costly repair bills for non-accident-related issues.
  • Peace of Mind: Ensures that unexpected vehicle breakdowns don’t strain your finances.

For many drivers, the unpredictability of mechanical issues can be a significant worry. Suddenly facing a hefty repair bill can throw a wrench in anyone’s budget. By investing in auto repair insurance, you can drive confidently, knowing that you have a safety net to handle those unexpected, expensive repairs.

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What is Auto Repair Insurance?

Auto repair insurance, also known as mechanical breakdown insurance (MBI), is a type of optional coverage designed to protect you from the financial burden of unexpected car repairs. Unlike standard auto insurance, which covers damages from accidents or external events, auto repair insurance focuses on mechanical and electrical failures within your vehicle.

Mechanical Breakdown Insurance

Mechanical breakdown insurance (MBI) covers a wide range of mechanical and electrical issues that can occur in your car. This includes problems with the engine, transmission, electrical systems, air conditioning, and suspension. Essentially, it helps you manage the costs of repairs that result from internal failures, not accidents.

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Optional Coverage

Auto repair insurance is optional, meaning it’s an additional coverage you can choose to add to your existing auto insurance policy. It’s similar to an extended car warranty but is purchased directly from your insurance company. This makes it a flexible option for those who want extra protection for their vehicles.

Financial Protection

The primary benefit of auto repair insurance is financial protection. Car repairs can be expensive, with common repair costs ranging between $500 and $600. Having this coverage means you won’t have to pay the full amount out of pocket for covered repairs. Instead, you’ll only need to pay a deductible, which can vary by insurer.

How Does Auto Repair Insurance Work?

Auto repair insurance can be a lifesaver when your car faces unexpected mechanical issues. But how does it actually work? Let’s break it down into three main parts: deductibles, the claim process, and repair shop choice.


A deductible is the amount you pay out-of-pocket before your insurance kicks in to cover the rest. For example, if your repair costs $1,000 and your deductible is $200, you’ll pay $200, and the insurance will cover the remaining $800.

Important Note: Deductibles for auto repair insurance are generally higher than those for extended warranties. Always check your specific policy to know what you’re responsible for.

Claim Process

When something goes wrong with your car, you’ll need to file a claim to get it fixed. Here’s a simple step-by-step guide:

  1. Identify the Problem: Notice a mechanical issue? Make a note of the symptoms and when they started.
  2. Contact Your Insurer: Call your insurance company or use their website/app to file a claim. Have your policy number and details about the problem ready.
  3. Inspection: In some cases, your insurer may require an inspection to verify the damage before approving the claim.
  4. Approval: Once the inspection is complete, a claims representative will determine if the issue is covered.
  5. Repair: If approved, you’ll receive instructions on how to proceed with the repair.

Pro Tip: Be honest about how the issue occurred. If your car’s electrical system fails because of a defective part, you’re likely covered. But if it fails because you tried to install an aftermarket radio and messed up, you probably won’t be.

Repair Shop Choice

Where you take your car for repairs can also affect your claim. Some insurance policies may restrict you to certain repair shops, while others give you more freedom.

Steps to Follow:

  1. Check Your Policy: Before heading to a repair shop, read your insurance policy to see if there are any restrictions.
  2. Preferred Shops: Some insurers have preferred networks of repair shops. Using these can sometimes speed up the process.
  3. Get an Estimate: If you’re free to choose a shop, get an estimate and confirm with your insurer that the repair will be covered.

Coverage Details

What Does Auto Repair Insurance Cover?

Auto repair insurance, also known as mechanical breakdown insurance, covers a wide range of major mechanical issues. Here’s what you can typically expect:

  • Engine: This includes problems like a blown gasket or complete engine failure.
  • Transmission: Covers failures in the transmission system, which can be very costly to repair.
  • Electrical Systems: From the car’s computer to wiring issues, electrical system repairs are included.
  • Air Conditioning: Whether your A/C stops cooling or has a mechanical failure, this is covered.
  • Suspension: Problems with the suspension system, such as shocks and struts, are included.

Other covered items often include the brake system, drive axle, cooling and heating systems, exhaust system, fuel systems, and safety technologies like blind spot awareness systems.

Example: If your car’s electrical system malfunctions, causing the car to not start, your auto repair insurance can cover the diagnostics and repairs.

What Does Auto Repair Insurance Not Cover?

While auto repair insurance covers a lot, it doesn’t cover everything. Here are some common exclusions:

  • Routine Maintenance: Tasks like oil changes, tire rotations, and brake pad replacements aren’t covered.
  • Wear and Tear: Normal wear and tear, such as worn-out tires or brake pads, is not included.
  • Collision Damage: Damage resulting from car accidents is not covered. For this, you need collision insurance.
  • Pre-existing Conditions: Any damage or issues that existed before you bought the insurance won’t be covered.

Example: If you neglect regular oil changes and this leads to engine damage, your claim could be denied due to poor maintenance.

Case Study: A National General Insurance policy excludes coverage if your car’s odometer exceeds 90,000 miles during the policy term. So, if you rack up miles quickly, you might lose coverage unexpectedly.

By understanding what auto repair insurance covers and what it doesn’t, you can better assess if this type of policy is right for you. For more insights into the costs associated with auto repair insurance, keep reading.

Costs of Auto Repair Insurance

Auto repair insurance, also known as mechanical breakdown insurance (MBI), can vary in cost based on several factors. Let’s break down the average cost, how deductibles impact your expenses, and what factors influence your policy’s price.

Average Cost

On average, auto repair insurance typically costs around $100 per year. However, prices can range from $30 to $100 annually. This variation depends on multiple factors, including your vehicle’s age, make, and model, as well as your driving history.

Deductible Impact

The deductible is the amount you pay out-of-pocket before your insurance kicks in. For auto repair insurance, deductibles tend to be higher than those for extended warranties. This means you might pay more upfront when you make a claim. For example, if your deductible is $250 and your repair costs $1,000, you’ll pay the first $250, and your insurance will cover the remaining $750.

Policy Factors

Several factors influence the cost of your auto repair insurance policy:

  • Vehicle Age and Mileage: Newer cars with low mileage typically have lower premiums.
  • Coverage Level: More comprehensive coverage options will cost more. If you opt for additional features like roadside assistance, expect a slight increase in your premium.
  • Driving Record: A clean driving record can help reduce your insurance costs. Insurers view safe drivers as lower risk.
  • Location: Where you live can impact your rates. Areas with higher incidences of car theft or accidents may see higher premiums.
  • Discounts: Some insurers offer discounts for bundling multiple policies, maintaining a good driving record, or even having certain safety features in your car.

Understanding these costs and factors can help you decide if auto repair insurance is a good investment for you.

Auto Repair Insurance vs. Extended Warranty

When deciding between auto repair insurance and an extended warranty, it’s important to understand the differences in eligibility, coverage limits, and costs. Here’s a clear comparison to help you make an informed choice.


Auto Repair Insurance: Typically, this type of insurance is available for new or nearly new cars. Also, many insurers exclude certain types of vehicles, so always check if your car is covered.

Extended Warranty: Extended warranties can be purchased for both new and used cars. You can usually buy an extended warranty until your car is five to seven years old or has up to 100,000 miles. This gives you more flexibility compared to auto repair insurance.

Coverage Limits

Auto Repair Insurance: This insurance covers major mechanical issues like engine, transmission, and electrical systems. However, it doesn’t cover routine maintenance, wear and tear, or damage from accidents.

Extended Warranty: Extended warranties also cover major mechanical defects, but they can vary widely in what they include. Some warranties are exclusionary, meaning they cover almost everything except for a list of specific exclusions. Like auto repair insurance, they generally don’t cover routine maintenance or wear and tear items.

Cost Comparison

Auto Repair Insurance: This is usually added to your car insurance bill and can be paid in monthly, semi-annual, or annual installments. That you’ll have a deductible to pay for each claim, which can be higher than that of an extended warranty.

Extended Warranty: These are often paid as a lump sum or rolled into your car loan payments. While this can be convenient, it means you’re also paying interest on the warranty. Extended warranties may come with a smaller deductible, sometimes as low as $50.

Here’s a quick comparison table:

FeatureAuto Repair InsuranceExtended Warranty
EligibilityNew or nearly new carsNew and used cars
CoverageMajor mechanical issuesMajor mechanical issues
ExclusionsRoutine maintenance, wear & tearRoutine maintenance, wear & tear
PaymentMonthly/annual installmentsLump sum/loan payments
DeductibleHigher deductibleLower deductible

Understanding these differences can help you choose the right option for your needs.

Is Auto Repair Insurance Worth It?

Deciding whether auto repair insurance is worth the investment depends on a few key factors: financial considerations, vehicle reliability, and risk assessment.

Financial Considerations

First, think about your budget. Auto repair insurance can cost anywhere from $30 to $100 per year, with the average around $100. While this might seem like a small price to pay for peace of mind, you also need to consider the deductible. When you file a claim, you’ll have to pay a deductible before the insurance kicks in. For example, if your deductible is $500 and your repair costs $1,000, you’ll pay the first $500 out of pocket.

Ask yourself:

  • Can you afford the monthly premium and the deductible?
  • Would an unexpected repair bill put a strain on your finances?

If the answer to these questions is yes, auto repair insurance might be a good fit for you.

Vehicle Reliability

Next, consider the reliability of your vehicle. Some cars are more prone to breakdowns than others. Researching your car’s make, model, and year on consumer reporting sites like RepairPal can provide valuable insights into potential issues and repair costs.

Example: If you own a car known for frequent transmission problems, auto repair insurance could save you a lot of money in the long run.

Risk Assessment

Finally, assess your risk. This involves considering how long you plan to keep your car and whether it’s still under warranty.

Factors to consider:

  • Age and Mileage: Newer cars with low mileage are less likely to need major repairs. However, if your car is older or has high mileage, the risk of breakdown increases.
  • Warranty Status: If your car still has a manufacturer’s warranty or an extended warranty, you might not need auto repair insurance. These warranties often cover major mechanical issues.

Example: If your car is no longer under warranty and you plan to keep it for several more years, auto repair insurance can provide valuable protection against costly repairs.

In summary, auto repair insurance can be a worthwhile investment if you want to avoid unexpected repair bills and your vehicle is no longer under warranty. Assess your financial situation, vehicle reliability, and risk to make an informed decision.

Next, we’ll address some frequently asked questions about auto repair insurance.

Frequently Asked Questions about Auto Repair Insurance

Do I need auto repair insurance if I have a warranty?

If you already have a new car warranty or an extended warranty, you likely don’t need auto repair insurance. These warranties usually cover the same major mechanical issues that auto repair insurance does, like engine and transmission defects.

However, maintain your car as outlined in your owner’s manual. Neglecting routine maintenance can void your warranty.

Example: Sarah bought a new car that came with a 3-year manufacturer’s warranty. She doesn’t need auto repair insurance during this period because her warranty covers major mechanical breakdowns.

How do I know if my car is eligible?

To determine if your car is eligible for auto repair insurance, check a few key factors:

  1. Age and Mileage: For example, Geico offers coverage for cars less than 15 months old or with fewer than 15,000 miles.
  2. Warranty Status: If your car is still under a manufacturer’s warranty, you might not need additional coverage.
  3. VIN Check: Use your Vehicle Identification Number (VIN) to check warranty status. You can find the VIN on the driver’s side dashboard or door jamb.

Example: John bought a used car from a private seller. He contacted the manufacturer with his VIN to confirm the car was still under warranty, making auto repair insurance unnecessary for now.

Does auto repair insurance cover accidents?

No, auto repair insurance does not cover damage from car accidents. For accident-related repairs, you’ll need collision insurance or comprehensive insurance added to your auto insurance policy.

Collision insurance covers damage from car accidents, while comprehensive insurance covers non-collision events like vandalism, fire, and theft.

Example: If Emma’s car is damaged in an accident, her collision insurance will cover the repair costs, not her auto repair insurance.

Next, we’ll explore the costs associated with auto repair insurance and what factors can affect your premiums.


In summary, auto repair insurance offers valuable protection against unexpected mechanical breakdowns. It covers major components like the engine, transmission, and electrical systems, providing peace of mind for those unpredictable moments when your car needs significant repairs.

At Toth-Felty Insurance, we understand that every driver’s needs are unique. That’s why we offer personalized solutions tailored to fit your specific situation. Whether you drive a new car or an older model, our team will help you find the right coverage to keep you on the road without breaking the bank.

Peace of mind is priceless. With auto repair insurance from Toth-Felty Insurance, you can drive confidently knowing that you’re protected from costly repairs. We’re here to support you every step of the way, ensuring that your insurance plan evolves with your needs.

For more information or to get started with a personalized quote, visit our auto insurance service page. Let us help you drive with confidence and peace of mind.

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