Do you need mechanical repair insurance?

If you’re familiar with the term ‘mechanical repair insurance’, but are unsure what it means and whether you should get it, here is a rundown to help you decide. Let’s start by defining the term mechanical repair insurance.

What is mechanical repair insurance?

When you purchase standard car insurance cover, you’ll be covered for things such as theft and accidents but not for mechanical problems like engine repairs and auto-electrical faults. To have those automotive problems covered, you require mechanical repair insurance, which is sold as a separate product.

The main reason to consider purchasing a plan is to give yourself peace of mind. This is so that if you do have a mechanical problem, you won’t end up paying potentially high repair costs entirely out of your own pocket.

The reality is that the cost of repairing cars – especially European car models – isn’t cheap in New Zealand. You can be looking at thousands of dollars in repairs if there is a significant mechanical fault, especially if it involves the replacement of parts.

Why should I buy mechanical repair insurance?

There are many great benefits of having mechanical repair insurance, including:

  • Peace of mind – you’re not going to get hit with huge repair bills if something goes wrong.
  • Less stress – repair bill disputes are handled directly by your insurance company.
  • Flexible – mechanical repair insurance plans are calculated based on the term of the cover, the condition and quality of your car, and the kilometres you’ve traveled.
  • Greater choice – you can cover any car, regardless of how old it is, which gives you more choice in the car you buy.
  • Bonus services – most plans cover extra services such as roadside assistance and towing, and insurance cover for rental cars is sometimes included.
  • Easy to pay for – it’s easy to pay for your plan monthly by credit card or bank transfer.

What does mechanical repair insurance cover?

Mechanical repair insurance plans usually cover the following types of repairs:

  • Engine repairs
  • Fuel system repairs and replacement
  • Automatic or manual transmission repairs
  • Electrical repairs
  • Suspension repairs
  • Brake repairs and replacements
  • Turbo unit repairs and replacement
  • Air conditioning systems
  • Cooling systems
  • Steering systems

These are just some of the most common repairs covered, but many plans will include more, so it’s best to check your mechanical repair insurance policy before signing up.

What’s not covered in a mechanical repair cover plan?

Most mechanical repair plans will have some restrictions as to what they cover. Generally, you can expect the following to be excluded:

  • All pre-existing problems with the vehicle when you bought it.
  • Any issues that relate to a manufacturer’s recall.
  • Most cosmetic issues such as upholstery and paintwork.
  • Damage to your car as a result of incorrect use of fuel, oil, and other fluids.
  • Any costs of carrying out regular servicing such as changing the oil, new tyres, replacing light bulbs, etc.
  • Entertainment system repairs or replacement.
  • Rust and corrosion damage.
  • Accident damage, theft, and water damage.

Again, it’s best to check your policy before signing up and also keep in mind that some of these repairs and issues will be covered in your regular car insurance.

The bottom line

If you want peace of mind knowing you won’t be hit with big bills if your car breaks down, then purchasing mechanical repair insurance is for you. It’s a great way to make car ownership less stressful and make sure you can get your car back on the road if you experience any mechanical problems.