Is car repair insurance bettThere are many options to cover your car to lower repair costs, including the lesser-known auto repair insurance route. er than a car guarantee?
What is Auto Repair Insurance?
Auto repair insurance operates similar to any other form of insurance policy: money is charged to cover premiums when certain requirements are met. This makes auto repair policies very attractive on paper; you can get money or reimbursement for repair work that you would otherwise have to pay out of pocket.
As with all things in life, things are not that simple when it comes to how auto repair insurance really works. Repair insurance is a specific type of policy that pays under certain conditions. In other words, not all repairs are covered.
Coverage depends on the type of part and the cause of the need for service in the first place. All repair policies detail these conditions in advance, so you know exactly what is covered and what is not covered, even before you buy the policy.
Aside from knowing just what auto repair insurance is and what privacy policies it covers, knowing how it differs from typical auto insurance is also helpful. It is a common assumption that auto insurance and auto repair insurance are the same.
This is actually far from the truth.
Auto repair insurance versus auto insurance
To legally drive your car, you probably have some sort of minimum level of car insurance that covers your vehicle (and yourself). Regular auto insurance essentially covers you in the event of an accident or unexpected event that was out of your control.
Car insurance sometimes pays for repairs to repair the damage caused by these things, but it is nowhere near as extensive as a typical car warranty. Car repair insurance is different here.
With auto repair insurance, more types of repairs and services are covered under more conditions. You don’t necessarily have to have an accident to cover repairs. While they are not fully comprehensive and cover everything in a vehicle for things as simple as routine maintenance, they provide more than just general auto insurance.
The difference is best seen between the auto repair insurance and the minimum liability insurance that you need to drive legally. Liability insurance, which is considered a form of car insurance, does not pay for any repair work.
Instead, it applies to potential legal (and sometimes medical) fees that arise after an accident. Therefore, this type of insurance would not be enough to get the cost savings coverage that you would need on your vehicle.
Find the right choice
When it comes to deciding between auto repair insurance and car warranty, it helps you think about what you need in terms of coverage. This will largely depend on the vehicle itself.
For example, if it is a fairly new product, you may find that it requires little or no repair, because repair work may be limited to routine maintenance due to normal wear and tear and unexpected factory defects.
However, older vehicles begin to require more work as they age. This is where repair insurance or an extended warranty can make sense.
If your vehicle is eligible for car repair insurance, you can choose a smarter option. Because payments are made over time, the less initial investment is required. On the other hand, car repairs require less time to complete repairs because claims are usually not required.
More than anything, keep an eye on the list of inclusions and exclusions that both insurance and warranty policies have. These will tell you how much coverage you get with each option.