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Cheap Breakdown Insurance - What You Need to Know About Cheap Breakdown Insurance

standard exclusions the company you choose

If you’ve ever struggled to pay for an unexpected car repair, you can appreciate the
concept of cheap breakdown insurance. You pay a single annual premium and a small
deductible for each repair and you never have to worry about unexpected car repairs

Or do you? A lot can depend on the fine print in your insurance contract, as well as the
company you choose, and a few standard exclusions.

Some cars may not need an extended warranty. Most new cars are well covered by
the manufacturer’s warranty, and regular maintenance will avoid the need for most
unexpected repairs. Certified used cars have been thoroughly inspected and may also be
covered by a dealer warranty. Some makes such as Lexus, Toyota, and Honda may seem more reliable then some other brands; however, they can all become costly when it comes to repairs.

Standard Exclusions

Most insurers don’t cover pre-existing conditions. So if you suspect a major repair is
imminent and buy cheap breakdown insurance with the expectation that the major repair
will be automatically covered, think again. Most experts advise not making any claims
within the first sixty days the policy is in force to avoid the close scrutiny such claims

Another problem not likely to be covered is the problem caused by deferred maintenance
or neglect. Be sure to follow recommended schedules for oil changes, tune-ups, and
other regular maintenance tasks in order to prove adequate maintenance.

Unless your policy specifies coverage for wear and tear or electrical issues, they may
not be covered. You can include coverage for wear and tear, but the policy will be more

The Company You Choose

Breakdown insurance or extended warranties can be obtained from many sources,
including dealerships, online insurers, banks/credit unions and a wide variety of private companies who now offer cheap breakdown insurance. Each company varies in price,
terms and reliability. The most expensive policies are usually those offered by the dealer.
They may require you to obtain repairs only at that dealership—difficult if you’re out
of town on vacation when the car breaks down. By including them in the financing
package, you will substantially increase the overall cost due to interest on the total
amount financed. The dealer will often pressure you to obtain the coverage at the time of
purchase. However, you may want to take time to research other options before deciding.

Generally online insurers are among the least expensive; however, before deciding on a company, read online reviews and look for consumer complaints. Are any complaints outstanding, or were they resolved to the consumers satisfaction? Be especially cautious of cheap breakdown insurance sold by cold calling telemarketers or dramatic TV ads. They may dramatically overestimate “typical repair costs” or use high pressure tactics. Some states have consumer protection laws again high pressure tactics, but they may not be enforced in an effective manner.

The Fine Print in the Contract

Carefully read the insurance agreement. Is the deductible “per repair” or “per visit”? A
single visit may include multiple repairs, so there may be a big difference in deductibles.
Is service limited to a specific geographical area? Will the warranty company pay the
shop directly, or do they expect you to pay for the repair and wait for reimbursement
from the company?

Is there a procedure to disputing denied claims? Be sure you carefully follow procedural
requirements throughout the claims process. Some companies may require pre-
approval or multiple estimates. Nearly all require that both covered repairs and regular
maintenance be performed by certified mechanics, so your brother changing the oil
may not meet maintenance requirements. The company may also require certain types
of parts be used for the repair such as expensive original manufacturer parts, least expensive aftermarket parts, or even parts purchased from the insurer itself which may delay repairs.

Besides being familiar with the terms of the service contract, you need to check with your favorite mechanic to make sure he will accept payment from the insurer. Some may accept such payments, but prioritize work to provide the fastest service to customers paying cash.

Inexpensive breakdown insurance can give you peace of mind and help you avoid
expensive surprise car repairs. In order to get the most benefit from the insurance, you
need to make sure that the policy will cover your needs and treat you fairly. By choosing
carefully, you can avoid claims problems and enjoy driving your car for many miles
to come.

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