Will Car Insurance Pay for Repairs?

Most drivers in the United States rely on car insurance to pay for repairs after an accident. And for good reason! Even a fender bender can leave you with a hefty repair bill, so it's reassuring to know you have some financial protection in your corner.

But what exactly does car insurance cover when it comes to repairs?

Not all car insurance policies are created equal. The type of coverage you have will determine how much your insurer will pay for repairs after an accident, as well as the obligations you must meet.

In this article, we will review different types of car insurance coverage and what they mean for you when it comes time for repairs.

What Type of Repairs are Covered by Auto Insurance?

If you find yourself in the unfortunate situation of being in a car accident, your insurance policy may cover the cost of repairs. The type of coverage you have will determine when your auto policy is likely to extend coverage and when you're likely to be on your own.

Repairs From Auto Accidents (Collision Coverage)

If you're in a car accident or hit a pothole, your insurance should cover the cost of the repairs if you elected to include collision coverage in your policy. In most states, your insurer will provide coverage regardless of who was at fault for the accident. If the other driver was at fault, your insurance carrier would help you and then subrogate or seek reimbursement from the other driver's carrier. You would be required to pay any deductible that you selected for the collision coverage of your policy.

If you did not choose to include collision coverage in your policy, no coverage would be extended by your insurance carrier for repairs resulting from a collision. However, if you were not at fault, you may be able to pursue a claim with the at-fault driver's insurance carrier.

Repairs From Damages Not Relating to Collision (Comprehensive Coverage)

Comprehensive coverage is what you would use if your car was stolen or damaged from something other than a collision. Like collision coverage, you would be required to pay any deductible that you have for comprehensive coverage.

Here are some examples of causes of loss that are typically covered under the comprehensive coverage of an auto insurance policy:

Fire
Theft
Vandalism
Falling objects
Animal damages
Natural disasters
Riot/civil disturbance

If you didn't elect comprehensive coverage in your policy, coverage would not be extended in these scenarios. This is another situation where, if the incident was caused by a separate entity, you may be able to file a claim with their insurance company.

Total Loss

Whether it’s the result of a collision or a comprehensive claim, if the repairs exceed the value of your vehicle, your insurance company may deem your car a total loss. In this case, you would be issued a check for the value of your car (minus any deductible you may have) to purchase a new vehicle.

How Car Insurance Claims are Calculated

When your car is damaged due to a covered cause of loss and needs repairs, there is one primary way insurers will calculate the amount paid for repairs: actual cash value (ACV).

Actual Cash Value (ACV)

ACV takes into account depreciation or the decrease in value of your car due to normal wear and tear, age, and mileage. So, if your car is considered a total loss, you would be paid the ACV of your vehicle, which may be significantly less than what you paid for it or owe on it.

Repairs That Are Not Covered by Insurance

While comprehensive and collision coverage can often save the day, there are some repairs that your insurance company won't cover. Some examples include:

Oil changes
Mechanical failure
A blown cylinder in the engine
Cosmetic damage from wear and tear
Failing air conditioning and entertainment systems

These are just a few examples, but if you're unsure whether or not your repair could be covered, you can always check with your insurance provider. Your standard auto insurance policy will not cover repairs that are needed due to normal use or general wear and tear on your vehicle. There needs to be an accident or incident that is covered under your policy in order for the repairs to be eligible for reimbursement.

How To Get Coverage Beyond Collision and Comprehensive

If you're concerned about other repairs outside the realm of what your comprehensive and collision coverage will pay for, you may consider exploring different policy types or coverage endorsements to meet your coverage needs.

What is Mechanical Breakdown Insurance?

Mechanical breakdown insurance can cover the cost of repairs to your vehicle due to a mechanical failure of your vehicle's major systems, such as the engine and transmission. This type of insurance may be offered by your auto insurance company as an endorsement (or optional add-on), but it may not be available from all insurers or in all states.

Mechanical breakdown insurance is not offered by many insurance carriers, and when it is, there are usually conditions like having a new vehicle. Typically, mechanical breakdown insurance has a maximum payout per repair, and it may only cover repairs for a certain time period after the policy is purchased. And as noted above, not many insurance companies offer it. Be sure to read the fine print of any mechanical breakdown insurance policy before you purchase it to make sure it meets your needs.

Do You Need Mechanical Breakdown Insurance?

If you're on the fence about mechanical breakdown insurance, consider the age of the vehicle. Coverage for repairs due to mechanical failure may not be necessary if your car is relatively new, as it likely won't need as many repairs. On the flip side, if your car is older, mechanical breakdown insurance might be more expensive and harder to obtain.

How Much Can I Afford To Pay Out of Pocket for Repairs?

If you're worried about the potential of having to face costly repairs, mechanical breakdown insurance may give you some peace of mind. If you're comfortable paying for repairs out of your own pocket, you may not need this type of coverage.

What is an Extended Car Warranty?

An extended car warranty is a service contract that covers repairs or replacements of your car parts after the manufacturer's warranty expires. An extended warranty may be offered by your car dealer, your auto insurance company, or third-party companies.

Extended warranties don't usually provide quite the level of coverage offered by mechanical breakdown insurance, but they may be a good option if your car is no longer covered by a manufacturer's warranty and you cannot or do not want to obtain mechanical breakdown insurance.

Do You Need an Extended Car Warranty?

Just like mechanical breakdown coverage, extended car warranties are not required. However, they can make sense depending on your circumstances and risk tolerance.

Cause for Pause

If you're considering an extended warranty or mechanical breakdown insurance, make sure to do your research before signing on the dotted line, especially if the company initiated the contact through phone, direct mail or email. Telemarketing schemes offering car warranties can go far past being just a nuisance and can truly damage their victims' finances. Be sure you're working with a reputable, legitimate company.

Coverage Endorsements

Many insurance carriers will offer coverage endorsements that can upgrade your insurance coverage. There are many types of endorsements, but a few common ones for auto insurance related to how much car insurance will pay for repairs include:

Replacement Cost Value (RCV)

RCV is typically only available as a separate endorsement to your policy if you have collision or comprehensive coverage on your policy, and it adds an additional cost to your premium. When using RCV, your insurer will pay to repair or replace your car with a new one of similar make, model, and quality without taking into account depreciation.

With this coverage type, if you have an accident and your car is totaled, your insurer would provide you with the funds to purchase a brand-new car as opposed to a used one.

Modified Car Coverage

This type of coverage is available as an endorsement on your policy if you have collision or comprehensive coverage and pays to repair or replace parts on a modified car. A modified car is a vehicle that has had changes made to its engine, transmission, suspension, interior, or exterior beyond the manufacturer's original specifications.

If you have a modified car, you may want to consider this coverage endorsement so you aren't left footing the bill for repairs that would otherwise be covered if it weren't for the modifications.

Get Car Insurance Coverage Today Through Clearcover

When it comes to car repairs, knowing what your car insurance policy covers will help you understand what to do in the event of a car accident. Clearcover is on a mission to make car insurance simple and affordable. Elevate your car insurance experience with a quote from Clearcover today!