Does car insurance cover repairs?

Have you ever been hit with an unexpected repair bill and wondered whether your car insurance would cover it? Owning a car in Canada is as much about responsibility as it is about convenience. Although routine maintenance can help prevent breakdowns, no vehicle is immune to unanticipated issues.

One of the biggest misconceptions among car owners is that their car insurance covers all types of repairs. In reality, the type of coverage you have and the circumstances that led to the damages will determine whether your insurance provider will pay for repairs or whether you'll be paying out of pocket. In this article, we’ll break down when car insurance does and doesn’t cover repairs, the different types of coverage that can help, and what steps you can take to protect yourself from expensive repair costs.

Understanding car insurance policies

From supply chain issues to inflation and increased labour costs, the average repair cost for Canadian vehicles is approximately $75/hour, highlighting the importance of choosing the right auto insurance coverage.

Car insurance coverage is designed to offer protection against financial loss arising from unforeseen events related to your vehicle. As we said, the answer to the question, "Does car insurance cover repairs?" depends on the type of coverage you have and how the damage occurred:

Are mechanical repairs covered under standard auto insurance policies?

Most coverage options won't cover mechanical repairs or routine maintenance. Vehicle owners are responsible for taking care of their own vehicles and properly maintaining them throughout their lifetime. Typical maintenance and repairs you'll need to pay for out of pocket include:

• Brake pad replacements.

• Tire rotations and replacements.

• Oil changes and fluid top-ups.

• Battery replacements.

• Engine and transmission failures.

If you're looking for an auto insurance policy that covers non-accident repairs like mechanical failures, adding mechanical breakdown insurance as an optional coverage may be worth the added investment. Unlike an extended warranty, also known as a manufacturer's warranty, MBI car repair insurance covers unexpected car failures beyond maintenance. For example, if your vehicle's transmission fails due to wear and tear, a standard car insurance policy won't provide coverage. However, with this car repair insurance, your repair costs may be covered depending on your policy details. With vehicle repair costs up 18% over the past three years alone, purchasing this additional coverage on top of your current plan can give you added peace of mind knowing that you have full coverage against wear and tear and other damages.

Hypothetical scenarios of when car insurance coverage covers damages

Before you buy insurance, let's go over a few more hypothetical scenarios where different auto insurance covers repairs below:

Collision damage (collision insurance)

A driver is involved in an accident that causes damage to their vehicle. After filing a claim, the physical damage to their car costs $2,000. Because the driver has collision coverage, they don't pay for the full car repair costs. Instead, they only need to pay their deductible.

Natural disasters or severe weather (comprehensive car insurance)

A severe hailstorm shatters a driver's front windshield. Because they opted for additional protection when purchasing insurance, their comprehensive insurance will pay for repairs after the driver pays their deductible.

Vandalism or theft (comprehensive coverage)

A driver's car, which is parked in a public parking lot, is stolen while they are running errands. Because the driver knows that insurance claims for stolen vehicles reached a record $1.5 billion in 2023, they purchased comprehensive insurance from their insurance company. If their vehicle is found, any damages will be covered by their insurance company. If the vehicle is not recoverable, they'll either receive an actual cash value payout or a replacement cost value payout from their provider to purchase a new vehicle.

Explaining deductibles and claims

As we mentioned briefly in the hypothetical examples above, some insurance policies, like comprehensive coverage and collision insurance, require policyholders to pay a deductible before insurance kicks in to cover the remaining repair costs.

Example calculation

After filing a claim with your insurance provider, the damage to your car is quoted by an automotive shop at $3,500. Because you opted for a $500 deductible when purchasing coverage, you'll only need to pay that amount to have your vehicle repaired. The remaining $2,500 will be covered by your insurance company.

Tips for filing insurance claims efficiently

• Document your vehicle damage as much as possible with numerous videos and photos.

• Contact your insurance provider as soon as possible following the collision or loss.

• Get repair estimates from numerous reputable mechanic shops in your area.

Ensure you're protected from unexpected repairs

To avoid costly surprises in the future, consider purchasing these insurance options:

• Choose comprehensive coverage: If you live in an area prone to natural disasters like wildfires or flooding, or an area that has high vehicle theft rates, add comprehensive coverage to your plan.

• Collision coverage: Living in a high-traffic area like a big city can increase your risk of being in an accident. If you want repairs covered following an at-fault collision, choose collision car coverage as well to supplement your mandatory coverage.

• Consider gap insurance: If you have a car loan or lease your vehicle, gap insurance will cover the difference between the car's value and the remaining loan balance if your car is deemed a write-off following an accident.

• Review your policy annually: Driving habits change. To ensure your insurance matches your current needs, review your coverage before renewing your policy each year, so you have the full coverage you need without paying for protection you don't need.

How BrokerLink can help

With repair costs rising and auto theft reaching record highs across Canada, ensuring you have the right coverage is more important than ever. At BrokerLink, we help Canadians find affordable insurance coverage.

With years of experience, our brokers are here to guide you throughout your insurance journey so you can feel confident in the coverage you purchase. We're also here to answer questions about whether mechanical negligence is covered by your provider or other questions related to your coverage.

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