Does Car Insurance Cover Mechanical Problems?

·5-min read
Photo credit: Reza Estakhrian - Getty Images
Photo credit: Reza Estakhrian - Getty Images

Does car insurance cover mechanical problems? Unfortunately, in most cases, you will have to pay out of pocket if your vehicle needs this type of repair. Your basic auto coverage will only pay for damage resulting from an accident, not from mechanical malfunctions or general wear-and-tear. However, some major insurance companies do offer optional mechanical breakdown insurance, which pays for malfunction-related repairs after your vehicle runs out of warranty.

The Facts on Mechanical Breakdown Insurance

You could potentially save thousands on auto repairs with a mechanical breakdown policy. This type of insurance generally covers malfunctions of the engine, steering, air conditioning, fuel system, power system, exhaust, brakes, transmission, and drive train, according to WalletHub. Some policies even pay for routine maintenance on your car, such as fluid replacement, new brake pads, new tires, new spark plugs, and new filters. Usually, this type of policy works just like a manufacturer warranty.

If you're interested in mechanical breakdown coverage, seek out an insurer that offers this type of policy and read the restrictions carefully. For example, GEICO only covers mechanical failure for cars with less than 15,000 miles and less than 15 months old. Mercury requires you to buy a policy within 30 days of the expiration of your vehicle's manufacturer warranty. In addition, the insurance company may remove this type of coverage as your car gets older, usually once it hits 100,000 miles or seven years. As a result, few people end up using their coverage before it expires since new-model cars tend to be quite reliable.

A mechanical breakdown insurance policy usually has a deductible of less than $250, so it's best to use it only for significant repairs. You must get prior authorization for the repair from the insurance company and then file a claim for the work to be done at any authorized mechanic. The insurer will pay the repair shop directly, but you must pay the deductible.

You can also find out if your current auto insurance company offers riders for mechanical breakdown. You can usually renew this coverage, which costs extra, every 100,000 miles or seven years depending on the exact terms and conditions of your policy.

Extended Warranty vs. Mechanical Breakdown Coverage

If you bought your vehicle new, it most likely came with warranty coverage, which offers assurance that the manufacturer will fix problems that arise which are covered under the warranty. Similarly, used cars will often come with a transferred warranty if the original owner sold the car before their warranty has expired. If you want longer coverage, you can also buy an extended warranty from the dealer or a third-party warranty firm.

While not technically an insurance policy, an extended warranty for your vehicle can cover the cost of mechanical breakdown and other required repairs. Your car is probably still under warranty if it is new enough to qualify for mechanical breakdown insurance. Make sure to review your extended warranty closely if you are buying a mechanical breakdown policy so you do not duplicate your existing coverage unnecessarily.

According to Value Penguin, most warranties cover the powertrain, which are the components that make the car go, and bumper-to-bumper, which refers to the rest of your vehicle. Often, the powertrain warranty lasts longer than the bumper-to-bumper warranty and can fix issues with your vehicle's axles, gears, transmission, emission control system, transfer case, drive system, and engine. notes that most bumper-to-bumper policies last for 36,000 miles or three years, whichever is shorter. These policies typically do not offer coverage for repairs associated with environmental damage, chemical damage, bad fuel, lack of maintenance, alteration, misuse, or accidents. Powertrain warranties average 60,000 miles or five years, whichever comes first.

While mechanical breakdown coverage costs less per month than an extended warranty, it can be more difficult to purchase this type of insurance if you have an older car. Extended warranties tend to have less flexible coverage than mechanical breakdown insurance and do not usually cover regular wear and tear on your vehicle.

Extended warranties from the manufacturer cost about $1000 to $2000 depending on the type of vehicle you have. According to data from Consumer Reports reported by, about 55 percent of people who buy this type of coverage never file a claim, but that most people who do file a claim report satisfaction with the process. The source also indicates that 41 percent of buyers of third-party warranties report satisfaction, compared to 53 percent of factory-warranty buyers.

Other Types of Auto Insurance

Liability coverage pays for the costs incurred by other drivers and passengers if you are at fault in an accident. Bodily injury liability covers medical bills while property damage liability covers repair and replacement costs. Most states require drivers to have a minimum level of liability coverage.

If you have collision insurance on your automobile, it will pay for damage that occurs in a car accident even if you caused the crash. You may also want to purchase a comprehensive insurance policy that pays for non-collision damage to your vehicle. For example, this type of policy pays for financial loss to your car that results from explosion, theft, fire, extreme weather, or falling objects. According to Policy Genius, comprehensive coverage would pay for mechanical repairs to your car that occur because of covered damage.

Uninsured motorist coverage covers repairs to your vehicle if you have an accident caused by a driver without insurance. You also have the option to purchase comprehensive, collision, and uninsured motorist coverage in 28 U.S. states.

Gap insurance pays for the difference between the amount you owe on your vehicle and the amount offered by the insurance company if you have a total loss. You might want to buy this type of optional coverage if you lease or finance your car.

If you worry about the cost of repairing your vehicle, you can pay for peace of mind with mechanical breakdown insurance. The premium for coverage protects you from a large, unexpected expense.

Check this out if you need additional information, resources, or guidance on car insurance.


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