Auto Service and Repair Insurance Explained

Auto service and repair insurance can be a lifesaver for car owners who want to protect their wallets from unexpected repair bills.

Most auto service and repair insurance policies cover the cost of repairs due to mechanical breakdowns or accidents.

If you're not sure what's covered, check your policy documents to see if they include a list of excluded parts, such as wear-and-tear items like tires and brake pads.

Having a clear understanding of what's covered will help you make informed decisions when it comes to maintaining and repairing your vehicle.

Car repair insurance is a type of auto insurance coverage that pays to fix mechanical malfunctions after a car's original warranty expires.

It's also referred to as mechanical breakdown insurance, which can save you from paying thousands of dollars for major mechanical failures.

This type of coverage is available from major insurance companies such as Geico and Allstate, making it a convenient option for many car owners.

Car repair insurance can be a lifesaver, especially if you're not prepared to pay out of pocket for expensive repairs.

Auto service and repair insurance can provide a financial safety net in case your car needs an expensive repair. The cost of this insurance varies, but a typical range is $30 to $100 or more a year.

Manufacturer warranties can cover more parts and for longer periods, making car repair insurance less necessary for some drivers. For example, Ford's new vehicle limited warranty covers parts that malfunction or fail due to a manufacturing defect for up to 36,000 miles or three years.

Cars today are more reliable than they once were, and regular maintenance can extend the time between major repairs. However, if your car needs an expensive repair after the manufacturer warranty ends, car repair insurance could be beneficial.

The cost of car repair insurance can be a significant factor in deciding whether to purchase it. A typical range is $30 to $100 or more a year.

You'll also need to consider the deductible, which can be $100, $250, or $300. This means you'll have to pay out of pocket before the insurance kicks in.

Cars are becoming more reliable, and with proper maintenance, they can go for many miles without needing a major repair. For example, Ford's new vehicle limited warranty covers parts and labor for three years or 36,000 miles.

Manufacturer warranties can provide peace of mind, but they do come to an end. This is where car repair insurance might be beneficial, especially if you're facing an expensive repair bill after the warranty has expired.

Having auto repair shop insurance provides the benefit of protecting you from most of the risks associated with running a business. This includes protecting your company, employees, customers, and others from potential lawsuits.

Knowing your company and assets are secure in the event of a lawsuit will give your customers confidence that you are a reliable company. This confidence can lead to increased customer loyalty and retention.

Auto repair shop insurance covers lawyer fees and potential damages, which can be very high. This financial protection allows you to focus on running your business without worrying about the financial implications of a lawsuit.

Having the right insurance coverage also helps you comply with certain regulations and operate legally. This is especially important if you're required to obtain minimum coverage in your location.

Auto repair shops face various risks, including general liability exposure from slips and falls on premises, which can be mitigated by providing customer waiting areas and ensuring floor coverings are in good condition.

Parking lots and sidewalks need to be well-maintained to prevent exposure to slips and falls, especially if the premises are open after dark. Adequate lighting and security measures are crucial to prevent accidents.

Products liability exposure can be high due to the potential for accidents if vehicles are not properly repaired, so incorporating check-off procedures to verify vehicles are properly serviced is recommended.

Some common risks include physical damage or losses to customers' vehicles while in the repair shop's care, custody, and control, which can be prevented by having a well-lit physical lot and implementing preventive measures to prevent vehicle theft.

The following risks can be mitigated by implementing proper safety measures: workers' compensation exposures from brake turning, welding, or other repair work, and lifting of vehicles by hoists, jacks, and other mechanical means.

As a business owner, it's essential to be aware of the common risks associated with auto repair shops. One of the primary risks is general liability, which can arise from slips and falls due to public access to the premises.

Slips and falls can occur due to poorly maintained floor coverings, uneven floor surfaces, and inadequate lighting. To mitigate this risk, it's crucial to provide customer waiting areas and restrict access to the garage area.

Parking lots and sidewalks should be well-maintained, with snow and ice removed, and level and free of exposure to slips and falls. Adequate lighting and security measures should be in place, especially if the premises are open after dark.

Here are some key measures to prevent slips and falls:

Products liability exposure can be high due to the potential for an accident in the event that the vehicle is not properly repaired. To mitigate this risk, auto repair shops should incorporate check-off procedures to verify vehicles are properly serviced.

Mechanical problems can be a real headache, and it's essential to understand what's covered and what's not. Car insurance typically doesn't cover mechanical problems unless you have mechanical breakdown insurance. This type of insurance costs around $50 to $100 a year and covers the failure of major vehicle systems such as the engine or transmission.

If your car's original warranty has expired, mechanical breakdown insurance can be a lifesaver. It can cost around $100 per year, on average, and can pay to fix major mechanical components. The cost depends on your car's make, model, and mileage.

Engine failure is a common mechanical problem, but car insurance only covers it if it was caused by a covered scenario like an accident or vandalism. If the damage was caused by poor maintenance, negligence, or wear and tear, you'll have to pay for repairs yourself.

Don't assume that car insurance covers mechanical problems; it's crucial to check your coverage details to see what's included. Mechanical breakdown insurance is usually a separate policy add-on that can be purchased from major insurance companies like Geico and Allstate.

Some companies are more transparent than others. CarShield, for example, has been around for nearly 20 years and has a 4.2 user rating on WalletHub.

However, it's essential to know that a company's legitimacy doesn't necessarily mean it's a great option. In the case of CarShield, it has a history of customer complaints.

CarShield offers 5 levels of protection plans, plus a motorcycle and ATV coverage plan and a roadside assistance program. Standard auto insurance typically doesn't cover these extra services.

Some customers may find CarShield's options appealing, but it's crucial to weigh the pros and cons before making a decision.

As you're looking into auto service and repair insurance, it's essential to consider the various types of coverage available. Garage keepers coverage is a common form of business insurance for auto repair shops, and it may include other lines of liability and property coverage within the form.

General Liability Insurance is a recommended coverage for auto repair shops, as it protects against accidents and injuries on the job site. Garage Keepers Liability is also crucial, as it covers damage to customers' vehicles while they're in the shop's care.

Business Personal Property, Hired and Non-Owned Auto, and Workers Compensation Insurance are also recommended coverages for auto repair shops. These policies can help protect your business from financial losses in case of accidents, theft, or property damage.

Shield programs are designed to provide protection and peace of mind for vehicle owners.

CarShield, for example, offers contracts that cover potential mechanical issues with new and used vehicles, including servicing for RVs and motorcycles.

Their contracts also provide protection for electric cars, which is a unique feature that sets them apart from other providers.

CarShield is an extended warranty provider offering contracts to drivers that cover potential mechanical issues with their new and used vehicles.

General Liability Insurance is a must-have for auto repair shops, providing protection against accidents and injuries on the job.

Garage Keepers Liability is another essential coverage for auto repair shops, covering damage to customers' vehicles in their care.

Business Personal Property insurance protects auto repair shops from damage or loss of business equipment and inventory.

Workers Compensation Insurance is required by law in most states and provides coverage for employees' work-related injuries.

Commercial Crime Coverage is recommended for auto repair shops to protect against employee theft, forgery, and other forms of business crime.

AAA does not offer auto repair insurance on a national level, but some state-level AAA clubs may offer it along with extended warranties.

Mechanical breakdown insurance can cost between $50 to $100 a year, depending on the policy and insurance company.

Car repair insurance, also known as mechanical breakdown insurance, costs an average of $100 per year. This cost can vary depending on several factors, including the car's make, model, and mileage.

Toco Warranty costs around $36 to $80 per month, although prices vary by state, driver, specific vehicle, and plan. This cost can add up over time, but it may provide peace of mind for drivers who want extra protection.

Auto repair shop insurance cost for small businesses varies based on location, size, payroll, sales, and experience. A $1 to $2 million limit policy can cost between $39 to $89 per month.

CarShield costs around $99 per month and up, depending on the state, driver, specific vehicle, and plan. This cost can be higher for older cars, high-mileage vehicles, or cars with known reliability issues.

Here are some examples of costs for popular auto service and repair insurance providers:

Keep in mind that these costs can vary depending on the specific plan and provider you choose.

Your warranty stays in effect even if you use aftermarket or recycled parts, but be aware that if a defective part is installed or not installed correctly, it could damage a part that the warranty covers, and the manufacturer or dealer can deny warranty coverage.

You don't have to use the dealer for repairs or maintenance to keep your warranty in effect, and the warranty company can ask for your maintenance records, so keep records of repairs and maintenance like oil changes, tire rotations, belt replacement, new brake pads, and inspections.

Car repair insurance can be worth it if you face an enormous repair bill, but the cost and deductible can add up, and it's worth asking what are the odds of needing it, especially with more reliable cars and longer manufacturer warranties.

Toco Warranty costs around $36 to $80 per month, though prices vary by state, driver, specific vehicle, and plan.

Toco Warranty sells four different vehicle service plans, which offer benefits such as no down payment, rental car coverage, and the ability to choose your own mechanic.

The costs can add up quickly, so it's essential to consider your budget before choosing a plan.

Here are the four different plans available from Toco Warranty:

Keep in mind that prices may vary depending on your specific needs and circumstances.

You don't have to use the dealer for repairs or maintenance to keep your warranty in effect. In fact, it's illegal for a dealer to deny your warranty coverage because you had routine maintenance or repairs done by someone else. The warranty company could ask for your maintenance records, so keep records of repairs and maintenance like oil changes, tire rotations, belt replacement, new brake pads, and inspections.

A manufacturer's warranty is included in the price of a new vehicle, and often covers your vehicle for a certain number of months or miles, whichever comes first. An auto service contract or extended warranty is optional and can be purchased at any time before the new-car warranty expires.

You can transfer an extended warranty to another owner when you sell your car, but car repair insurance is non-transferable. If you need to use your warranty, you may be required to use repair facilities chosen by the manufacturer or dealer.

The warranty stays in effect if you use aftermarket or recycled parts, but if someone installs a defective aftermarket or recycled part, or doesn't install a part correctly, the manufacturer or dealer can deny warranty coverage for the damaged part and charge you for repairs.

Here are some key things to know about warranties:

Your average car warranty lasts 3 years or 36,000 miles, according to the Kelley Blue Book. This timeframe gives you peace of mind as you drive your new vehicle.

Most car warranties cover repairs and replacements for parts and labor, but be aware that some manufacturers may have different terms. The specifics of your warranty will depend on the manufacturer and the terms of the agreement.

A 3-year warranty is a standard duration, but some manufacturers may offer longer or shorter warranties. It's essential to review your warranty carefully to understand what's covered and for how long.

The 36,000-mile limit is also a common threshold for warranty coverage, but some manufacturers may have different mileage requirements.

Return on investment is a crucial aspect of warranties and coverage. Typically, car repair insurance has a deductible that ranges from $100 to $300, which means it's of little value for minor repairs.

You'll only get a significant return on your investment for larger repairs, but even then, the insurance will only pay for a portion of the costs. According to AAA, common car repairs average from $500 to $600.

If you're considering car repair insurance, it's essential to weigh the costs against the potential benefits. Keep in mind that the deductible can eat into the savings, making it less effective for minor repairs.