From liability coverage to mechanical breakdown insurance (MBI), drivers can choose from multiple types of insurance for car repairs. Liability insurance pays for damages to another person’s car when you are at fault for an accident. Mechanical breakdown insurance pays for auto repairs caused by a parts failure on your vehicle.

In this article, we’ll show you how to take advantage of liability insurance and explain whether mechanical breakdown insurance is a good idea. We’ll also look into the best extended auto warranty companies to see how their plans compare to mechanical breakdown coverage.

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    What Is Car Repair Insurance?

    Car repair insurance usually refers to mechanical breakdown insurance, which covers the cost of repairs resulting from mechanical failure. MBI differs greatly from standard policies, as most insurance plans pay for vehicle repairs resulting from car accidents, environmental factors, or theft and vandalism.

    Insurance for car repairs, such as MBI, is not required in any state. This car insurance coverage is also not offered by all insurance providers, since it’s less popular and pretty similar to extended car warranty plans.

    Does Standard Insurance Cover Car Repairs?

    Insurance for car repairs and mechanical problems is not included in most car insurance plans. The seven most common types of car insurance are:

    • Bodily injury liability coverage
    • Property damage liability insurance
    • Collision coverage
    • Comprehensive coverage
    • Uninsured/underinsured motorist coverage
    • Medical payments (MedPay)
    • Personal injury protection (PIP)

    Each type of coverage only goes into effect after there has been an accident or external event that damages your vehicle. If your car experiences a mechanical breakdown due to worn, faulty, or malfunctioning parts, a car insurance company will not normally provide compensation.

    If you have a new car, mechanical problems may be covered by your manufacturer’s warranty plan. These typically provide three years of bumper-to-bumper coverage and five years of powertrain component protection.

    For longer coverage lengths, turn to a factory extended warranty, one of the most reputable extended car warranty companies, or a provider of insurance for car repairs.

    Top Types Of Auto Insurance

    There are many kinds of car insurance packages available. Most states require liability insurance but make other types of insurance optional. See the chart below for a breakdown of the major repairs each type of insurance or vehicle service contract covers.

    Type of Coverage

    What It Covers

    When It’s Used

    Bodily injury liability insurance

    Medical bills for other drivers

    After an accident where you are at fault

    Property damage liability insurance

    Damages to other drivers’ vehicles

    After an accident where you are at fault

    Collision coverage

    Damages to your vehicle

    After an accident where you are at fault

    Comprehensive coverage

    Damages to your vehicle

    After your vehicle is damaged due to theft, vandalism, flying objects, or natural disasters

    Uninsured/underinsured

    Motorist Insurance

    Damages to your vehicle

    After an accident where the other driver is

    at fault and doesn’t carry proper insurance

    Medical payments

    Your medical payments

    After any accident in an at-fault state

    Personal injury protection

    Your medical payments

    After any accident in a no-fault state

    Mechanical breakdown insurance

    Repair or replacement of covered components

    After mechanical breakdown

    Extended warranty or

    vehicle service contract

    Repair or replacement of covered components

    After mechanical breakdown

    Of the coverage choices above, only mechanical breakdown insurance, extended warranties, and vehicle service contracts provide coverage for car repairs. If you’re looking for peace of mind that car components such as your fuel system, electrical system, and air conditioning are covered from mechanical breakdowns, it’s worth checking these options out.

    Mechanical Breakdown Insurance vs. Extended Warranties And Vehicle Service Contracts

    Mechanical breakdown insurance tends to cover many of the same components as an extended warranty or a vehicle service contract. All are designed to provide insurance for car repairs that are not the result of an accident.

    MBI policies are sold as insurance through state-licensed insurance companies. As insurance policies, they are subject to state insurance regulations. Extended warranties are offered through dealerships, while vehicle service contracts are sold through third-party companies unaffiliated with the brands they cover.

    Is Insurance For Car Repairs Worth It?

    Insurance for car repairs is worth it when drivers are looking for peace of mind that their cars are protected against unexpected and expensive repairs. While the effectiveness of coverage depends on your car’s reliability, it’s usually a good idea to have this backup plan.

    Below are some of the pros and cons of purchasing insurance for car repairs:

    Insurance For Car Repairs: Pros And Cons

    Pros of Insurance for Car Repairs

    Cons of Insurance for Car Repairs

    Covers repairs through low monthly payments

    Doesn’t always pay for itself

    Helps with planning for unexpected repairs

    Has exclusions on certain parts and on routine

    maintenance costs like oil changes

    Provides peace of mind on the road

    May not be necessary on reliable vehicles

    Often offers additional benefits such as roadside assistance

    For many drivers, purchasing a vehicle service contract is an excellent way to get insurance for car repairs. Third-party extended warranty coverage keeps policyholders safe while offering peace of mind on the road. Choices from third parties also tend to cost less than automakers’ plans and offer benefits such as rental car reimbursement and roadside assistance.

    Recommendations For Extended Car Warranties

    Not every extended car warranty company is the same, so be sure to choose a provider that pays claims out reliably and efficiently. Two of the industry’s top choices are CarShield and CARCHEX.

    CarShield: Best Value

    CharShield has been offering low-cost warranties with generous financing terms for over 15 years. We contacted CarShield for quotes on the premium Diamond plan, which provides coverage similar to that of some new car factory warranties, for a 2018 Honda Civic. We were offered the following terms:

    • Term length: 5 years/70,000 miles
    • Financing: $88.78 for 18 months
    • Down payment: $295
    • Deductible: $100
    • Total cost: $1,708.03
    • Cost per year of coverage: $341.61

    CARCHEX: Best For Used Cars

    CARCHEX customer service stands out across the industry, as seen by the company’s A+ rating from the Better Business Bureau (BBB). Coverage terms reach as high as 250,000 miles, and overall costs from CARCHEX remain low.

    We asked CARCHEX for a quote on the premium Titanium plan–the company’s highest level of coverage–for a 2018 Honda Civic and were offered the following terms:

    • Term length: 7 years/125,000 miles
    • Financing: $107.25 for 24 months
    • Down payment: First month’s payment
    • Deductible: $100
    • Total cost: $2,574
    • Cost per year of coverage: $367.71

    Frequently Asked Questions: Insurance For Car Repairs

    • Do car repairs need insurance?

      You are not legally required to purchase insurance for car repairs. Vehicle owners can buy optional mechanical breakdown insurance, which pays repair bills resulting from parts failures or damages.

    • What happens if I damage my own car?

      If you damage your car, comprehensive insurance or collision insurance will cover the costs if you opt for these coverages. Liability insurance will not cover damages you cause to your own car.

    • What type of auto insurance pays for damages if you’re in an accident?

      If you are in an accident and the other driver is at fault, the other motorist’s liability insurance will pay for damages to your car. If you’re at fault, your collision insurance will pay for the damages. Collision insurance is not mandatory, and not all drivers have it.

    • What does car repair insurance cover?

      Mechanical breakdown insurance covers repair and replacement costs for specified vehicle components in the event of a mechanical breakdown. Every contract offers a different level of coverage, but normal wear and tear items like brake pads and wiper blades are almost always excluded from insurance for car repairs.

    • How much does insurance for car repairs cost?

      The cost of mechanical breakdown insurance depends on your vehicle and auto insurance policy provider. High-level exclusionary coverage for many years can cost more than $3,000. Basic policies purchased as add-on coverage can cost as little as $100 per month.

    • What does full coverage car insurance mean?

      A full coverage car insurance policy means that you’ve purchased comprehensive and collision coverage on top of your state’s minimum coverage requirements for insurance.