Auto Insurance Coverage

Weighing the Differences between Mechanical Breakdown Insurance and Warranties


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For those who are looking at options on keeping their vehicles on the road, some may want to know about the standard differences between mechanical breakdown insurance and a traditional warranty. Some of these agreements can seem very similar, depending on the specific terms of each individual type of warranty or agreement, but because mechanical breakdown insurance is really more of an insurance product than a warranty, there are some standard differences.

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Covering Parts and Labor

In a warranty, the idea is that the manufacturer is guaranteeing durability on something that comes out of a factory. That's why original warranties were manufacturer direct. Some car dealers also offer warranties based on their assessment of used vehicles. On the other hand, with any mechanical breakdown insurance policy, the focus is on keeping a car on the road. There's not necessarily a focus on guaranteeing specific engineering. Instead, policy writers focus on risk assessment and likely cost for fixing a vehicle.

Variables

Another big difference between a warranty or extended warranty and mechanical breakdown insurance is that with the insurance product, buyers can get a lot more flexibility. You're not likely to find manufacturer-direct warranties with things like deductibles. You are either covered or you're not. But with mechanical breakdown insurance, according to some insurance reviews, you may be able to get a deductible, partial coverage for certain auto systems or other "customization" that you feel may work out in your favor.

Warranty Offers

As mentioned above, in the case of a manufacturer direct warranty, the guarantee is offered from a specific party, the manufacturer, directly to the buyer. You could say the warranty is offered "in the course of" the deal. That is, as a natural part of buying the vehicle, the buyer gets some security through the warranty. This works in a similar way to a used car lot. On the other hand, with mechanical breakdown insurance, it's really not like that at all. A car owner will approach an insurer to get a policy, not in the course of buying a car, but in a completely different agreement. This is one big difference between taking a warranty and taking out a mechanical breakdown policy.

In-house Requirements

With the manufacturer direct warranty, the buyer may be required to bring the car back to the dealership, or to a certified mechanic registered with that specific auto maker. In a dealer's warranty, it's almost a sure bet that the buyer will have to go back to the dealer to get work done. With some of the best mechanical breakdown insurance out there, this is not the case. In some auto repair insurance policies, car owners can go anywhere they want to get work, and get reimbursed according to reasonable market prices.

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It is in your best interest to update your auto insurance policy to include a mechanical breakdown policy. A good reason for this update is that when the warranty is lapsed, the running insurance does not cover mechanical breakdowns. This leads to the situation where you are left with three options at this point:

  • Working with the consequences may take a big toll on your pocket.
  • Extension of the warranty on the car may reduce the cost a little by covering the engine only, which is available for a limited period.
  • Opting for a mechanical breakdown insurance policy would be the best option.
  • Included Parts

The benefits and coverage may include any or all of the things listed below; it depends on the mechanical breakdown insurance coverage that you purchase. This insurance essentially protects the engine, electrical system, gearbox, differential, drive shafts, steering, fuel system, air-conditioner, electronic ignition, braking and cooling systems. It is important to know that with discounts provided by most companies, the coverage options and the amount paid towards the insurance premium does not follow a linear proportionality. The difference between the minimum coverage policy and complete coverage options is lesser; therefore, it is better to opt for a full coverage policy. Companies help you in case of a breakdown by arranging for a tow truck, changing batteries or tires.

Some plans of mechanical breakdown insurance also include normal wear and tear of parts. Considering the recent escalation in prices of spares, this turns out to be a cheaper option to keep your car in good condition for a longer period of time.

Maintenance and Service

There are a number of clauses associated with the mechanical breakdown Insurance, as with the normal insurance policies. One of the clauses requires you to be particular about the regular maintenance servicing of your car. It is important to service your car based on a specific time frame or a mile rating set by the insurance provider. While the cost of oil seals, clutch plate, release bearing and pressure plate are to be borne by the owner of the car, mechanical breakdown insurance ensures that any problem, mechanical, electrical or electronic will be covered by the policy.

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In a number of cases brought before the short term insurance court, rulings have gone in favor of the insurance companies in cases of non-adherence of servicing plans. It is also suggested that the insurance policy for mechanical breakdown or an update on your auto insurance policy be obtained from a trusted and reputed company. To conclude, one must understand that this policy is not expensive since it can be an update to your regular auto policy, and the cost of the policy entirely depends on the choices you make.

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