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Why Auto Insurance Isn’t the Same As Auto Repair Insurance

You have just finalized your auto insurance policy to start driving in California and you’ve done well for getting cheap car insurance with your good record. But, now you’ve heard about something else called auto repair insurance. It sounds like something that would be covered under your car insurance policy, but unfortunately, it’s not.

What is the difference? Auto insurance is what allows you to legally drive on the road. It will cover you for costs incurred when you have a collision; anything broken or damaged in the collision is covered, of course, that would be anything after your deductible is paid. Even if your policy does cover collision and has comprehensive coverage, it will not cover repairs on parts that fail or wear out over time. Auto repair insurance is will cover these wear and tear maintenance costs for you. It is, at times, seen as an extended warranty on a new or leased car.

Auto repair insurance allows you to pay a small amount monthly, to cover any unforeseen repair problems that may arise, so that you won’t have to pay a huge lump sum if your car broke down after the manufacturer’s warranty ends. When you go for just a cheap car insurance policy without looking at the coverage, you are in for a surprise at what you will have to pay out-of-pocket should the issue come up.

A manufacturer’s warranty usually seems to last just as long as the car is still running fine. Many times, the day after this warranty ends is when you start noticing the car is experiencing problems. You do have the option to extend the warranty for typically, a few thousand extra dollars though. The better option would be looking into getting an auto repair insurance policy, on top of your regular auto insurance policy.

When you ask your auto insurance agent about the auto repair coverage, be sure to consider the following things:

1. Read the fine print. See how much the policy covers for hourly labor. If your policy covers only $60/hr. and your mechanic charges $75/hr., you’ll be picking up the tab for the rest of the labor cost.
2. What parts of the car will be covered? Is it bumper to bumper coverage only on parts that will keep that car running? Most bumper to bumper policies do not cover broken headlights, interior fixtures, or windows. What is usually covered are brakes, engine, transmission, exhaust, and electrical components in the car.
3. How soon can you get the check for the claim? You don’t want to have a failed engine lying around for a month because your auto repair insurance company makes it difficult to fulfill the claim.

A benefit of having auto repair insurance is knowing that an insurance company is on your side. Mechanics are unlikely to cheat you, as auto insurance companies know the correct costs for services and parts. Talk to an auto insurance agent to find out if getting the auto repair insurance is a good option for you.

Do you think repair insurance is worth it? Feel free to share your thoughts in the comment section below.

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