All You Need to Know About Mechanical Breakdown Insurance

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Since a standard auto insurance policy doesn’t cover repair costs unrelated to an accident, mechanical breakdown insurance is an option you can add to your policy. For drivers who put a lot of mileage on a vehicle, own one that is expensive to repair or put excessive wear and tear on it, the additional cost of mechanical breakdown insurance can save you money when it comes to auto maintenance and repairs.

Policy Specifics

The extent of coverage you get with mechanical breakdown insurance varies depending on the plan you purchase. More comprehensive plans cover nearly any type of mechanical breakdown, although even full repair coverage comes with limits and restrictions.

For example, some policies only pay a specified amount per hour for labor no matter what the auto repair shop charges. Another option is to buy a plan that covers certain auto parts or types of repairs. Read the policy carefully before signing so you are certain about what it covers if you have to file a claim.

Manufacturers Warranty

The manufacturer’s warranty a dealership offers when you buy a new car covers the cost of many repairs. Although extended warranties are similar in nature to mechanical breakdown insurance you buy from an insurance company, there are some differences. For one thing, you must pay the cost of an extended warranty in full upfront.

You can pay for mechanical breakdown insurance in monthly premiums. In addition, extended warranties often require that you take your car to the dealership for repairs, whereas mechanical breakdown insurance usually lets you take your car to an auto repair shop of your choice.

Benefits of Having Breakdown Insurance

Unlike a manufacturer’s warranty on a new vehicle that eventually expires, you can continue to purchase mechanical breakdown insurance for as long as you want. You also have the option of dropping the coverage anytime. While the age of your vehicle will affect the premium rate you pay, some insurance companies let you buy a policy for a used car, although there are usually more restrictions.

In other cases, an insurer might only allow you to take out coverage on a newer vehicle and then renew the policy for up to a certain number of years or miles. Another benefit of mechanical breakdown coverage is that you can design your policy to cover whatever auto parts or systems you want. Based on the policy features you choose, you can frequently buy breakdown insurance at a cost you can afford.

Premium Considerations

The monthly premiums you pay for mechanical breakdown insurance depend on the types of coverage you choose, the age and condition of your vehicle and the number of miles you put on your car. A vehicle that is older than five years typically costs more to insure than a newer vehicle.

Paying a deductible lowers the cost of the insurance. If you’re worried about high premiums, pay attention to whether a policy comes with hidden fees attached. Some insurers charge taxes, claim fees and processing fees in addition to your regular premiums.