Today many insurance companies are providing car repair insurance. This particular cover helps people in saving money as repair expenses are borne by the insurance provider. Moreover there is no requirement that the car should have been damaged in a collision or accident. Sudden breakdowns or repairs are very common even for new vehicles and the cost of repairs may hit the roof.
Some insurance companies cover only specified components/parts under this policy. Everything primarily depends on the insurance company providing the cover. It is necessary to check all the policy features/conditions before purchasing car repair insurance. In spite of many benefits provided by car repair insurance policy, drivers are not ready to take this cover due to its disadvantages.
Disadvantages of Car Repair Insurance
There are various disadvantages of car repair insurance like liability burden, partial covers, expensive monthly premiums and insurance companies taking a long time to settle claims.
Liability Burden: First is the liability burden which many drivers already have. There are drivers who just stick to basic covers like liability. Subsequently they realize that comprehensive or collision coverage is also equally important. So they take another policy which adds burden to their expenses. Adding another cover like car repair insurance will put more financial burden on them. This is one reason drivers are not willing to take car repair insurance cover. So it becomes necessary to select an insurance policy that provide all basic covers like liability, comprehensive or collision covers that are affordable. Car repair insurance does not replace the above cover.
Partial Covers: The car repair insurance polices do not cover all the components and the coverage is partial. Reading the policy document will reveal that many parts are not covered. Try to understand what are the basic features provided under this cover. Only a few specified components/parts are covered. Moreover insurance companies have different options/policies for insuring parts like engine, fuel system etc. This could cause heavy burden on the driver’s wallet. Partial coverage offered by insurers is unattractive to drivers and they are reluctant to take this cover. If insurance companies can offer customized policies, these drivers may purchase such policies that are really affordable and provide the necessary cover.
Expensive Monthly Premiums: The monthly premiums in case of car repair insurance are on the higher side. Many people think that it would be a better idea to buy a new car instead of paying higher premiums for vehicle repair insurance. When you buy a new car, there is auto insurance which will cover all the basic liabilities in case of any accidents/injuries. In such cases the liability is only for paying monthly premiums for auto insurance cover. The warranty offered by the manufacturer at no cost will take care of any non accident related repairs.
Insurance Companies Taking Long Time to Settle Claims: When you file claims with insurance companies, there are many formalities to be completed by insurers and also lot of paperwork is involved. This could take considerable time. Insurance Companies might take several months for settling claims and making payments to the policy holder towards repair expenses. So many drivers prefer to keep money in hand and use them for repairs rather than going for car repair insurance.
It is therefore advisable to have auto insurance as well as car repair insurance to protect your vehicle from all sorts of expenses.