Dealing with car troubles can be a huge headache, especially when it comes to expensive transmission repairs or replacement. When your transmission fails, you may be faced with an unexpected bill costing anywhere from $1,800 to $3,500 or more.
Naturally, many drivers wonder if their car insurance policy will help cover some of these costs.
So does car insurance cover transmission replacement?
Unfortunately, in most cases, the answer is no. Standard auto insurance policies are not designed to pay for mechanical breakdowns and routine maintenance. However, there are some situations where you may be able to get some coverage.
In this comprehensive guide, we’ll explain:
- What standard car insurance does and does not cover
- Limited scenarios where transmission repairs may be covered
- Additional insurance options to protect against transmission failure
- Steps to take if you need to replace your transmission
Let’s start with what basic car insurance includes and excludes when it comes to transmission repair and replacement.
What Does Standard Car Insurance Cover?
A standard auto insurance policy includes three basic types of coverage:
- Liability insurance – Pays for damage you cause to others in an accident
- Collision insurance – Covers damage to your car from colliding with an object
- Comprehensive insurance – Protects against damage from non-collision events like weather, theft, vandalism
Liability insurance will never cover mechanical problems like transmission failure, since it only applies to damage you cause to other parties.
Collision and comprehensive coverage only pay for transmission repairs directly resulting from an accident, weather event, theft, or vandalism. Wear and tear over time is not covered.
Unfortunately, age and high mileage – not accidents – are by far the most common causes of transmission problems. Standard policies exclude “mechanical breakdowns” and “routine maintenance.”
Key Takeaway: Regular car insurance does not cover transmission replacement costs due to mechanical failure, only damage directly caused by comprehensive or collision events.
When Might Car Insurance Help With Transmission Repair?
While routine transmission failure is not covered by basic auto insurance, there are some limited situations where you may be able to file a claim, including:
After an At-Fault Accident
If your transmission is damaged in an accident that was your fault, filing a collision claim with your insurer should cover repairs. This applies even if the transmission was already weak or failing beforehand.
The same goes for accidents caused by others – their liability insurance should pay for all damages.
Keep in mind collision claims come with a deductible, so you will pay some costs out-of-pocket.
After a Not-at-Fault Accident
If another driver hits your car and causes transmission damage, you can file a claim with their insurance company, no deductible required.
This is one case where it pays to carry full collision/comprehensive even if your car is older. Without it, you’d have to try to recover costs directly from the at-fault driver.
After Theft, Vandalism, or Natural Disaster
Comprehensive insurance covers damage from non-collision events including theft, vandalism, falling objects, fire, floods, and more.
If your transmission is damaged by any comprehensive claim cause, it should be covered after you pay the deductible.
Manufacturer Defect or Recall
The small chance your transmission failed due to a defect or part that was recalled should be covered by your car manufacturer’s warranty with no deductible. Make sure to ask your mechanic about potential manufacturer defects.
Key Takeaway: While rare, there are some situations where your auto insurer may help pay transmission repair bills, namely claims involving collisions, comprehensive events, or manufacturer defects.
Does Gap Insurance Cover Transmission Failure?
Another type of supplemental auto insurance is gap coverage, which helps pay the difference between what your car is worth and what you still owe if it’s totaled.
Gap insurance only pays out if your vehicle is deemed a total loss after an accident or theft. Mechanical breakdowns including transmission failure do not qualify.
So gap insurance does not cover transmission replacement costs. It is solely meant to protect you against losing money in case your car gets totaled, not routine repairs.
Does Extended Warranty Insurance Cover Transmission Replacement?
Unlike basic car insurance, extended auto warranties are designed specifically to cover major mechanical breakdowns after the manufacturer’s warranty expires. They can provide invaluable protection against expensive transmission repairs and replacement.
Not all plans are created equal, however. Here’s what to look for in a transmission extended warranty:
- Component coverage: Ensure the transmission assembly and all internal parts are covered.
- Repair reimbursement: Look for plans that offer replacement cost reimbursement rather than just repair coverage.
- Roadside assistance: Towing reimbursement is a must in case your transmission leaves you stranded.
- Reputable provider: Choose an established company with a track record of positive customer reviews. Avoid unknown providers.
While extended warranties come with monthly or one-time costs, they can save you thousands in transmission repair bills down the road. They offer much more comprehensive protection against mechanical failures than standard insurance.
How To File an Auto Insurance Claim for Transmission Damage
If your transmission sustained direct damage in a collision or other covered comprehensive claim event, here are the steps to file an insurance claim:
Report the incident to your insurer as soon as possible after it occurs. Provide all relevant details about how the damage happened and ask about coverages available for the repairs.
Take detailed photos of the transmission damage to submit as documentation for your claim.
Get a diagnostic test and repair estimate from your mechanic summarizing what transmission parts were damaged. Submit this with your claim.
Call auto repair shops to find the best price on parts and labor to replace or repair the transmission. Give this estimate information to your insurance adjuster.
Work with your adjuster to settle on a final claim payment amount based on the terms of your policy. You’ll receive a check for the agreed upon amount after paying your deductible.
Have the transmission repaired. Your settlement check helps cover parts and labor.
The process can be much smoother if you work with a trusted, experienced insurance agent who can handle claim submissions and negotiations on your behalf.
Steps to Take When Your Transmission Fails
When your transmission first starts having issues, here are the key steps auto experts recommend:
- Have it inspected by a mechanic as soon as problems arise to diagnose the issue.
- If repairs are recommended, get a detailed estimate with a breakdown of parts and labor costs.
- Call your insurance company to find out if any coverage applies.
- Check whether your vehicle manufacturer’s warranty still applies.
- Consider purchasing an extended warranty if the transmission needs replacement.
- Ask your mechanic if there are any transmission class action lawsuits against your vehicle maker that could help you recover costs.
- Get quotes from multiple repair shops to compare pricing if you have to pay out-of-pocket.
- Consider selling the vehicle rather than paying for a replacement if repair costs exceed its value.
Taking quick action at the first sign of transmission trouble and exploring all your options gives you the best chance of minimizing costs.
The Bottom Line
While transmission replacement can be an expensive car repair, understanding what your insurance does and does not cover can prevent headaches.
Standard auto policies only pay for transmission damage directly caused by collisions and covered comprehensive events, not mechanical failure due to wear and tear.
Purchasing an extended warranty or vehicle service contract is the best way to protect yourself against costly transmission breakdowns as your car ages.
If you do end up with transmission repair costs, work with an experienced insurance agent to make sure you use all options available and receive the maximum claim payout. With the right protection plan in place, you can rest easy knowing you’ll be covered against this major auto repair.
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