Your NZ Car Insurance Doesn't Cover Major Repairs. Here’s Why.

May 15, 2021
Car Insurance
By Staff writer

No one really wants to imagine their car breaking down, though it's not a far off possibility. Unless you’re incredibly knowledgeable with your vehicle’s components and maintenance, you may not immediately know what’s wrong with it. Worse, you may even spend a lot just to get your car running again. This is usually where mechanical breakdown insurance comes in, which then leads to the valid question: Doesn’t my regular car insurance cover all these repairs?

Does Car Insurance cover repairs?

Your car insurance policy will cover damages, but only under certain circumstances such as a collision. In case your car gets into an accident with another vehicle, your car insurance policy can pay for the damages to both depending on your level of cover. They can also pay for repairs for unexpected damage such as fire and theft.

On the other hand, most breakdowns technically can be prevented via proper routine maintenance and care. As these responsibilities fall on the vehicle owner, car insurance doesn’t cover any damages that naturally arises from wear and tear. They won’t cover any engine repairs or replacing old electrical components.

However, you can go for mechanical breakdown insurance if you need help with these things. Coverage may vary between different insurers, but you can generally expect things like your car’s electrical systems, fuel systems, transmission, steering, and even your car’s cooling systems among other things. 

Mechanical breakdown insurance doesn’t charge large payments up front too, making it relatively easy on your budget. It's paid at regular intervals, allowing it to not cost you as much, and it's similar to your standard car insurance policy.

That said, it’s important to consider the caveats of having a mechanical breakdown insurance policy as well.


What isn’t covered by my Mechanical Breakdown Insurance in NZ?

Like with car insurance, not all instances of damage can be covered by your mechanical breakdown insurance in NZ. For example, mechanical breakdown insurance still won’t cover the costs of routine upkeep and maintenance which includes tire rotations, oil changes, and regular tune-ups. It also doesn’t cover any damages your car already incurred prior to purchasing a policy.

It’s also possible that insurance companies start looking at your car’s mileage. Generally, it’s a lot harder to find mechanical breakdown insurance for high mileage cars where such problems are common. It’s a lot easier to get a policy for a brand new or relatively new vehicle without a lot of miles.

And of course, mechanical breakdown insurance doesn’t cover any damages arising from collisions or accidents, which are covered under your own standard car insurance instead. And if you have an extended warranty on your vehicle, the coverage may also not include the things covered by that policy. Recalls are also covered by the manufacturer so you don’t have to worry about paying for that as well.

Mechanical Breakdown Insurance vs. Extended Warranties

Another option you can look for to protect your car is an extended warranty. Extended warranties are typically purchased at the same time you buy your vehicle. On the other hand, mechanical breakdown insurance only kicks in when your warranty ends, allowing you to purchase it later down your vehicle’s life.

On the other hand, your warranty is paid up front. There’s no going back on this expense. This is usually paid in premiums over time which can be dropped. An extended warranty also requires you to bring the car back to the dealership for repairs, allowing you to use your preferred repair shop.

Mechanical Breakdown Insurance Providers in NZ

If you're planning to purchase mechanical breakdown insurance, you do have a number of options. 

AA Mechanical Breakdown Insurance

AA’s mechanical breakdown cover helps protect you from unexpected costs, especially if you’re buying second-hand cars which may be more prone to mechanical breakdowns. Common inclusions include:

  • Cover for mechanical or electrical breakdowns
  • Replacement of consumable items if they’re required
  • Cover for 12, 24, to 36 months depending on your preferences
  • 30-day back money guarantee provided you haven’t made a claim within that time frame
  • Quality guarantee for all repairs authorised and carried out under your policy

Protecta Mechanical Breakdown Insurance

Protecta mechanical breakdown insurance helps protect your investment from unexpected damages. In terms of inclusions, it is pretty similar to what AA mechanical cover offers with some differences such as offering just a 15-day money back guarantee so long as you haven’t made a claim under the policy. They also provide a generous claim entitlement when you purchase your policy with a low excess option depending on your vehicle.

Olive Mechanical Breakdown Insurance

Olive is an easy option for mechanical breakdown cover in NZ. It helps protect you from costly auto repair bills, giving you the peace of mind you need to enjoy your road adventures. It’s instant, affordable, and comprehensive, making it easy for you to avail of a policy online. 

Is it worth the money to get Mechanical Breakdown Insurance?

Repair costs of any vehicle will vary, depending on the model, the age of the vehicle, your insurer, and some of your other benefits. Remember that you may have to pay deductibles in order for this insurance to take effect as well. Generally, this is pretty good for paying off big repair bills when they happen.

That begs the question though: How reliable are the car models of today. What are the odds of experiencing extreme breakdown during the life of your vehicle?

Cars have been designed to be a bit more reliable in recent times, with good fuel economies that allow them to go for many, many miles before needing major repairs. There’s also your manufacturer’s warranty and extended warranty options to consider as well.

In that case, your car may go on so long for many miles until it’s no longer eligible for mechanical breakdown cover. On the other hand, it can be worthwhile if you encounter a major repair in the window between the time your manufacturer warranty ends and your car insurance may no longer be renewed.

Alternatively, you can also try putting some savings into an emergency fund in case your car’s warranty starts to run out. This allows you to put the money to some other use should you not need to repair your car, making it a bit more flexible. 

So should I buy Mechanical Breakdown Insurance in NZ?

Ultimately, the answer all depends on you. This type of cover may not necessarily be for all car owners but it can be a valuable purchase for people looking for cover if they’re worried about expensive repair bills once their warranty runs out. If you plan on getting breakdown cover, start by doing your research in order to see which offer suits your circumstances. We can help you out here! Start by using our free comparison page at glimp, and get the best interest rates today!

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