Who Pays for Vehicle Mechanical and Electrical Failures?
Often people look for solutions after something happens, rather than having a contingency plan in place for likely unfortunate incidents. And it is almost impossible to insure every part of our lives and difficult to know exactly how far our existing policies go. Of course, there is the issue of affordability. Forget vehicles, people may not even have enough money to buy health insurance at times. Naturally, people may think (or hope) that their auto policies pay for an engine blow-up.
Typically, they are there for totally unexpected and sudden losses that are beyond motorists’ control. They usually come in three parts. Collision coverage pays for damages to own automobiles due to road accidents. Comprehensive is for other main perils like flood, fire, and storm. And the liabilities section is the legally required part that covers injuries and damages caused to third parties by the policyholder. You cannot have car insurance full coverage cheap if it includes everything.
Considering that an auto mechanical issue isn’t something unexpected or extraordinary, it is not difficult to see why an ordinary auto policy wouldn’t be interested in it. If you own a vehicle, you should expect that things can go wrong for many reasons. As long as the damages aren’t because of the above reasons, you won’t get your car repaired by an insurance company unless you buy additional protection for this purpose.
What Is Warranty, and Can It Be Extended?
The good news is that most automobiles are sold with a manufacturer’s warranty. The bad news is that they are good for the first few years or up to a certain mileage. Mostly, they are good for up to 3 years or 30,000 miles (whichever comes first). Another piece of good news is that they can be extended through dealerships or third-party providers for a similar term or even longer. Essentially, there are two types.
· Comprehensive Warranty includes almost anything in between two bumpers from air conditioning to steering wheels and, of course, any total failures.
· Powertrain Warranty is mainly concerned with the parts that make a vehicle run, like the engine, axles, and transmission. So, you could get a blown-up engine replaced if the vehicle is nearly new or you have an extended warranty. An extension is usually offered by dealerships once it expires or when buying a used auto.
What Is Mechanical Breakdown Insurance?
Now, there is an alternative to extended warranties, and it is offered by auto insurers. This option may be advantageous in many ways and cheaper. First of all, you don’t have to make one lump sum payment like the case in warranty. The insurance company can add the small yearly or six-monthly premium to your standard policy, and it is renewed every year.
However, there are major limitations as well. Firstly, they may not accept applications for cars older than one and a half years or with more mileage than 15,000. The problem with that is that the warranty would still be active, and you wouldn’t need it at that time. However, once you are in, you can keep renewing it for up to 7 years or 100,000 miles. Also, you would have to pay higher deductibles each time you need a repair under MBI that may not be viable for minor issues. They may not accept performance or high-end automobiles under this provision.
The Third Alternative
Of course, you could get none of them and pay for any repairs out of pocket as and when needed. Considering how reliable cars are now, this may actually be a calculated risk. Instead of paying hundreds of dollars for something that may never happen, you may keep it. If it happens, you use the money to pay for it. Otherwise, the whole amount stays in your pocket. Now you know the options available to be protected against a sudden engine blow-up or a major electrical issue with your car.