In Safe Hands: Why You Need Auto Repair Insurance

Martin Williams, 33, bought his first car at the age of 23 in 1996 - a secondhand Peugeot 406. What he neglected to do was buy an auto repair insurance policy at the same time. "The model had been launched that very year, so even though the car was secondhand, it was in great condition," he says. Nonetheless, within four months of the purchase, Martin found himself landed with a broken rear axle. "These mechanical problems can crop up any time, but it was only when the repair center asked me whether I had auto repair insurance that I learnt that such a thing exists," says Martin.

Like him, many car owners are unaware of the benefits of auto repair insurance, which, in our opinion, is becoming increasingly essential as auto repair costs spiral and, if you are unfortunate enough to require a major repair job done on your car, you can be assured that the bill will in all likelihood be astronomical.

So auto repair insurance would appear to be a sensible choice. However, you have to tread carefully when buying a policy. Like all insurance policies, an auto repair insurance policy is essentially a contract between a vehicle owner and the insurance company that binds the latter to pay for all repairs done on the vehicle for a fixed length of time. However, what complicates matters is the fact that coverage varies widely from company to company and few states in the US regulate the coverage. So it would make sense for a car owner to acquire detailed knowledge about auto repair insurance jargon and industry requirements.

However, there are certain basic areas that a standard auto repair insurance policy covers. Chief among them are breakdown and wear and tear, though the two are not always mutually inclusive. Some companies may offer only breakdown coverage, which means they are only liable to pay for repairs necessitated by breakable parts. So the sensible thing would be to buy a wear and tear policy as well , which covers parts that wear out over time.

Additionally, there are policies that cover the engine, transmission, and other parts of a vehicle through which oil flows. However, this would be least preferable in terms of coverage since it does not include a majority of a vehicle's components. Then there are the bumper-to-bumper policies, which cover nearly all the mechanical systems of a vehicle (from bumper to bumper), though there is an exclusion list for such policies, listing parts that are not covered. For instance, no policy covers parts like brake pads and windshield wipers. Likewise, most policies do not cover overheating resulting from a faulty radiator.

So before you buy your auto repair insurance, make sure you know exactly what is covered, as well as how much you will be paying by way of deductibles. Even if the manufacturer covers your vehicle for a certain period, it would make sense to buy a policy as soon as possible because as your vehicle clocks up the miles, the cost of a policy will increase, as will repair costs. And consider this: if you buy a transferable policy, you can actually leverage it to increase your car's resale value. Even if the manufacturer's warranty has lapsed, you can still receive coverage on vehicles that have done less than 100,000 miles.

You see? With auto repair insurance, therefore, not only do you gain protection from unexpected mechanical failures, but also buy peace of mind. Whether you own a new or secondhand car, buying auto repair insurance today releases you from the burden of higher rates later.

Don't wait. Let us find you the right car insurance, home insurance, health insurance, life insurance or long term care insurance—today!