Auto Repair Insurance

This is not to be confused with manufacturers' warranties or the supplemental warranties that used car dealers sell.

I've paid my car off and continue to drive it because I do not want another car payment. However, the manufacturer's warranty has expired. The car is old enough for things to break, but new enough to make the repairs expensive. If a major item breaks on it, I'm likely to pay the equivalent of two or more payments to get it fixed.

I propose a voluntary supplemental insurance that covers non-warranty car repairs. This insurance could be priced in such a way as to be profitable to insurance companies and attractive to consumers. Rates would be based on the age of the car and repair statistics by make and model. The policies can be further refined to only cover failures that prevent the car from running. If the motor swallows a valve or the starter quits, you're covered at this percentage. If the air conditioner fails, you're covered at that percentage. It all depends on how much peace of mind you're willing to pay for. As with other types of insurance, the rates could be bought down with higher deductibles.

Insurance companies would have networks of authorized service providers. These service providers have to meet certain criteria (in the US, members of the Better Business Bureau, ASE certified mechanics on staff, etc). Reimbursement for hourly repair rates would be negotiated by the insurance companies at or near fair market value. The major benefit to repair shops is that participation brings in business. Customers can choose to take the work to out-of-network repair shops, but at a higher deductible. In short, it's managed health care for cars.

We already have roadside assistance, towing insurance and extended warranties. I'd be more than willing to pay a reasonable monthly premium for the peace of mind of knowing that if I turn my motor to slag tomorrow, I don't have to fork out $3K or more to get it running again.