What is Car Repair Insurance?

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Rachel Bodine graduated from college with a BA in English. She has since worked as a Feature Writer in the insurance industry and gained a deep knowledge of state and countrywide insurance laws and rates. Her research and writing focus on helping readers understand their insurance coverage and how to find savings. Her expert advice on insurance has been featured on sites like PhotoEnforced, All...

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Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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Reviewed by Leslie Kasperowicz
Farmers CSR for 4 Years

UPDATED: Jul 18, 2021

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What You Should Know

  • Car repair insurance is a type of auto insurance coverage that’s purchased outside of your collision, comprehensive, and liability auto policies
  • Car repair insurance covers the repairs of mechanical malfunctions following the expiration of a car’s warranty period
  • Alternatives to car repair insurance include an extended warranty, regular maintenance, or an emergency fund

Many people wonder one simple question: “Does car insurance cover repairs?” The quick answer is not usually. Car repair insurance is a type of auto insurance coverage that’s purchased outside of your collision, comprehensive, and liability auto policies. As such, it covers the repairs of mechanical malfunctions following the expiration of a car’s warranty period. 

But is car repair insurance worth it even if you don’t have to pay the most expensive car repairs? Or is it better to take it to an auto repair shop and pay the vehicle repair cost out of pocket? In this article, we’ll cover all you need to know about auto repair insurance, including:

  • Car Repair Insurance Coverage
  • How Car Repair Insurance Works
  • Advantages of Car Repair Insurance
  • Disadvantages of Car Repair Insurance
  • Who Can Get Car Repair Insurance
  • When You Need Car Repair Insurance
  • Cost of Car Repair Insurance
  • Alternatives to Car Repair Insurance

Let’s get started! 

Car Repair Insurance Coverage

Car repair insurance is for exactly as it states—car repairs. However, there’s always fine print. In this case, auto repair insurance typically only covers select mechanical failings, including those that involve:

  • Brakes
  • Transmission
  • Engine
  • Exhaust system
  • Power system
  • Steering
  • Air conditioning
  • Drivetrain
  • Fuel system

So what doesn’t car repair insurance cover? Major repairs categorized as normal maintenance, as well as any new additions such as new brakes, tires, or spark plugs are typically excluded in a typical car repair insurance policy. Additionally, auto repair insurance usually omits the below in a policy: 

  • Accident damage
  • Damage due to neglect
  • General wear and tear
  • Corrosion or rust
  • Cosmetic damage (such as paint, rims, and trims)
  • Pre-existing damage
  • Recalled parts
  • Any systems already covered by your car’s warranty

Typically, your collision coverage and comprehensive auto insurance will cover these costs, depending on your policy. 

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How Does Car Repair Insurance Work?

A car warranty is the car manufacturer’s promise to help pay the cost of repairs or replacement parts. Typically, a car warranty lasts anywhere from three to 10 years. It’s a “commitment” you can lean on should your car incur a mechanical failure in those initial years. 

Once that auto warranty period ends, you may be eligible to purchase an extended warranty through the car manufacturer or an outside company. But if that’s not the case, car repair insurance can act as your replacement (or supplement) to the manufacturer’s warranty. 

Numerous insurance companies offer this type of coverage. However, car repair insurance often comes with several time-sensitive limitations:

  • New Car Favorability – Car repair insurance is typically only awarded to those with newer cars. Additionally, insurance companies may raise rates if you fail to sign up for the coverage within close proximity to the expiration of your car’s warranty.
  • Mileage Limits – The older your car becomes, the more likely it is to break down or require maintenance, Due to the aging process, you’ll likely need to drop your coverage once your car surpasses 100,000 miles, as premiums typically increase.
  • Minor Repairs Are Not Covered – Since most car repair insurance policies have a deductible, minor repairs that cost less than $500 are not always covered.

How to File a Claim

An insurance claim is a formal request to an insurance company for monetary coverage of a loss or repair. To file a claim, contact your insurance company over the phone or through a mobile app (if provided). Insurance companies typically require “proof of claim” forms that depict the extent of the damage.

Tip: If your car is scheduled for a considerably long stint at the body shop, find out whether or not your auto insurance policy pays for a rental car to get you back on track. 

The Advantages of Car Repair Insurance

Despite its exclusions, car repair insurance is a cost-effective solution for those looking to acquire coverage not provided through collision or comprehensive insurance policies. Consider the following advantages:

  • A La Carte Experience – Car repair insurance allows drivers to pick and choose coverage for specific auto systems (such as the engine and transmission systems in preference to the exhaust and power systems). The customization of car repair insurance policies provides cost-effective coverage for your car’s most unredeemable qualities, offering preemptive coverage for specific mechanical breakdowns.
  • Budgeting Optimization – One of the greatest advantages of car repair insurance is its role in budgeting for auto repair costs. Costly repairs often cause financial burden. A repair policy can mitigate the impact of a pricey automobile breakdown and lower overall auto costs.
  • Cost Regulation – An auto repair insurance policy will not only contribute to repair payments, but regulate the costs to avoid unfair or overpriced appraisals at the hands of unruly mechanics. 

The Disadvantages of Car Repair Insurance

While car repair insurance can mitigate costly repairs, you may be asking yourself: is it really worth it? Let’s explore a few of the disadvantages to gauge if car repair insurance is right for you:

  • Partial Coverage – The customization of auto repair insurance is appealing. The inability to predict which parts are going to break first? Not so much. The a la carte nature of car repair insurance can be costly if you wish to cover several systems. Unless you already know that your car suffers from specific mechanical issues, car repair insurance may be impractical.
  • Handling a Claim – Claims handling can be tricky. After filing a claim, insurance providers may point to fine print that omits any obligation to pay for the repairs. In this case, the driver will be responsible for paying the insurer and covering repair costs. If an insurer agrees to pay for a repair, drivers may still experience a long wait time before the payment is received.
  • Potentially Costly – If your car is in good condition, car repair insurance may be an unnecessary drain on your pocket. The car insurance may prove futile to your car’s well-functioning mechanics, or even expire before use. 

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Who Can Get Car Repair Insurance?

Most often, insurance providers withhold auto repair coverage from vehicles that do not meet certain guidelines, such as minimum or maximum mileage requirements. 

For example, an insurance company may deny your request if you’re the owner of a relatively older car with more than 80,000 miles. If your car is newer, however, you’re more likely to receive coverage. If you’re curious about eligibility, check with your insurance provider to learn if you and your car meet their coverage requirements. 

When Do You Need to Get Car Repair Insurance?

Car repair insurance is your fail-safe for when your car is in need of costly repairs—it’s your knight in shining armor, your caped money-saving savior. 

Extensive car repairs often take a toll on your wallet. 

Accordingly, it’s beneficial to invest in an auto repair insurance policy as early as possible in order to mitigate expensive repair costs and maintain the integrity of your car. As stated, an optimal time to acquire car repair insurance is when your car warranty nears expiration. 

How Much Does Car Repair Insurance Cost?

Your insurance may cover most average car repair costs, but you’ll also have a premium to pay. Typically, the price of your premiums will depend on a few factors:

  • The age of your car
  • The mileage of your car
  • The condition of your car
  • Insurance deductibles
  • Unforeseeable expenses 

As you already know, a younger, well-functioning vehicle with less mileage is the prime candidate for car repair insurance, and will most likely result in lower premiums. Plus, the type of car matters too. If your car is one of the cheapest cars to repair, you may be in better luck than someone who drives a Porsche. 

You might only be paying a few hundred dollars on a vehicle that’s less than five years old. Any older, your premium may double. Similarly, if the mileage of your car is less than the average mileage calculated by your insurer, prices will usually remain affordable.  

However, you must also consider the financial impact of insurance deductibles and hidden costs. A deductible is a specified amount of money that the driver must pay before an insurance company will cover the claim. If the cost of repair is less than the deductible, consider whether or not an investment in auto repair insurance is worthwhile. 

Additionally, hidden charges such as taxes, surcharges, and processing fees may arise. That’s why it’s paramount that you identify all possible costs (and ask the right questions) before signing on the dotted line.  

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Alternatives to Car Repair Insurance

If you’re looking to avoid paying costly fees on auto repairs but don’t want to invest in car repair insurance, there are a few options to explore:

  • Extended Warranty – An extended car warranty is a service contract that pays for a car’s mechanical repairs. Drivers can purchase extended warranties directly from car manufacturers or through a third-party provider after their original car warranty expires. 

Although it’s similar to car repair coverage, it’s also much more expensive. The average cost ranges anywhere from $1,500 to $3,000 dollars. However, extended warranties may be worthwhile if your car is prone to breakdowns or damage.

  • Regular Maintenance – Avoid breakdowns and fix-ups with regular maintenance. Visit a trusted mechanic who can upkeep your car according to your car manufacturer’s recommended maintenance schedule.
  • Emergency Fund – Funnel the money you would use to pay for an insurance policy into an emergency fund to prepare for any unforeseeable future auto expenses.

Get a Quote with 4AutoInsuranceQuote.com 

Searching for the right type of auto insurance is no doubt a tricky undertaking. Here at 4AutoInsuranceQuote.com, we compare the cheapest prices from each insurance company in the industry to make your search easier.

With our free insurance quote tool, we offer a comparable list of the most affordable rates in the country. We make sure you’re getting the best bang for your buck by providing A.M scores, too. With this information at the helm, there’s nothing you can’t uncover!

Ready to find your car repair insurance? Perfect. We are too. 


  1. Insurance Information Institute. How Do I File a Claim. https://www.iii.org/article/how-do-i-file-claim

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