Put simply, auto repair insurance is especially valuable if you own a used foreign vehicle, or any vehicle that is costly to repair. It is purchased in addition to your regular auto insurance policy, but the two work in conjunction with each other.

Many car owners are uninformed of the distinct advantages of auto repair insurance. After your car warranty runs out, this kind of insurance should cooperate with your auto insurance in order to safeguard you against huge car repair bills.

How It Works

Like auto insurance, an auto repair insurance policy is a binding legal contract between you and your auto insurance carrier, binding the company to cover all repairs done on your car for a set time frame.

Coverage fluctuates extensively from company to company and hardly any states regulate auto insurance coverage. It is essential to familiarize yourself with auto repair insurance terms and industry requirements, but do not overlook researching how auto repair insurance is (or is not) regulated by your home state.

What It Covers

A normal auto repair insurance policy characteristically covers the breakdown and typical depreciation of your car, even though the two are not always jointly inclusive. Some companies only offer breakdown coverage, meaning that they are only responsible to cover repairs caused by breakable parts. If you wish to add a depreciation policy to cover parts that deteriorate over time, you may have to buy it from an independent company (or consider shopping around for an insurance company that has both).

There are also auto repair insurance policies that only compensate for damage/repair to the engine, transmission, and the parts of a car through which oil flows. This should be your last resort when you shop for auto insurance, because it does not include the bulk of a car’s parts.

Bumper-to-bumper policies are obtainable from some auto insurance companies, covering almost all of the mechanical systems of a car (hence the term “bumper to bumper”). The policy will make mention of any components not covered. For example, policies do not usually cover components such as brake pads and/or windshield wipers. Similarly, many policies do not cover overheating as a result of a defective radiator.

Before you purchase your auto repair insurance, confirm that you understand precisely what is covered, in addition to how much you will be forced to pay in deductibles. Although the manufacturer’s warranty has come to an end, you can still obtain coverage on vehicles that have seen fewer than 100,000 miles. Remember that as your car’s mileage increases, the cost of a policy increases, as do repair costs.

Important Note: If you purchase a transferable policy, you can leverage it to maximize your vehicle’s resale value.

While many drivers are very conscious of the perks of having auto insurance, few recognize just how auto repair insurance can protect them from unforeseen repair bills. After reading this, you should now have a better grasp of how it works so you can make a more informed decision regarding whether this kind of insurance meets your individual auto insurance needs.

Learn how auto repair insurance can offer you peace of mind. Get your free Albuquerque auto insurance quote now!