Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products including home, life, auto, and commercial and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, largely in the insurance...

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UPDATED: Sep 22, 2021

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Important facts to know...

  • Transmission damage may be covered if the damage falls under the accident or comprehensive coverage
  • Routine care and maintenance issues would not be covered under normal auto insurance policies
  • Mechanical breakdown insurance may cover non-accident transmission repairs

Among the gravest fears a car owner has is hearing the words, “You need a new transmission.” Repairs on cars can be costly. Few jobs are costlier than restoring a transmission system to its proper operational condition.

Due to the many sophisticated parts that comprise a vehicle’s transmission, minor repairs are rare. A broken transmission does need to be replaced or rebuilt.

The transmission system performs a critical function: it allows the engines and the wheels on a car to work harmoniously. Once a transmission fails, the car won’t run.

With the fearful cloud of a $2,500 transmission repair bill looming over a driver’s head, the question, “Does auto insurance cover transmission repair?” arises.

The answer depends on the circumstances and the type of coverage involved.

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Will car insurance cover you if you don’t care for your car?

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No auto insurance policy is likely to cover any losses due to a lack of routine repair and maintenance.

Vehicle owners do need to care for their car’s transmission. Probably the biggest reason for transmissions to fail would be a lack of flushing or changing the transmission fluid. Someone who never changes the transmission fluid is simply asking for trouble.

Aged, brownish or blackish fluid is not going to lubricate transmission gears properly leading to impurity and friction-related damage.

Transmission leaks could also yield devastation, which is why car owners need to have minor inspections performed at regular intervals.

Would a car insurance policy pay for transmission damage due to an owner being negligent with routine care? No policy would cover such a loss. This fact does not mean there aren’t any circumstances in which an auto policy would cover repairs.

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What does liability insurance cover?

Liability insurance is intended to cover losses to property and bodily harm. If a driver crashes into a vehicle and destroys the transmission, filing a claim against the negligent person’s auto insurance policy may recoup the costs for fixing the transmission.

This claim assumes the person has insurance. If not, then no claim can be filed against the driver’s non-existent insurance company. Vehicle owners who opt to take out uninsured or underinsured auto insurance coverage may be able to file a claim against losses on their own policy.

Can you file a claim with comprehensive and collision insurance policies?

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A claim against comprehensive and collision policies may be possible upon suffering transmission woes. If a transmission system is ruined by a flood that causes massive amounts of water to enter the system, filing a comprehensive insurance claim would be feasible.

Similarly, a driver with collision coverage who hits a speed bump at a high rate of speed and wrecks the transmission could file also claim. Whether or not the insurance company chooses to pay out in such a situation is uncertain.

When can a totaled car be declared a total loss by an insurance company?

Depending upon how serious the damage is, the insurance company may deem the vehicle a total loss. In short, the car is considered totaled.

If the cost of a car’s resale value is $1,500 and the cost of the transmission repair is $2,500, the insurance company is probably only going to pay for the resale value of the car.

A car worth $3,000 that has suffered $2,500 in damage still may be deemed totaled by the insurance company.

Perhaps in such scenarios taking the settlement and using it as a downpayment on a new or used vehicle would be wiser than fixing the transmission.

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Which form of coverage can help you if your transmission system is damaged?

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Most people are familiar with the following types of coverages:

  • liability coverage
  • uninsured motorist coverage
  • collision coverage
  • comprehensive coverage

There is another type of coverage available as an add-on to policies. This addition would be mechanical breakdown insurance (MBI), a type of coverage that might help those whose transmission system is damaged.

Not every insurance company may offer this type of coverage, which is why effective comparison shopping needs to be performed. Through comparing what different policies have to offer, finding a good deal on mechanical breakdown insurance may be possible.

What is considered mechanical breakdown insurance?

Mechanical breakdown insurance is similar to a warranty in the sense it covers the costs of repairs to a vehicle that “just happen.”

What will or won’t be covered under mechanical breakdown coverage is going to be clearly spelled out in an auto insurance policy. In New York, the regulations for this type of insurance are strict.

It is important to read policies closely and carefully to understand what the insurance company will or won’t pay for.

Keep these things in mind when performing basic comparison shopping so as to acquire effective the MBI coverage.

MIB insurance is not available for all cars. One company may only cover a new vehicle. Limitations on mileage may be in place. Some may require the original warranty to remain in effect.

This type of insurance could be a good investment for those worried about transmission troubles. Still, the odds of a transmission system failing on a brand new car – or one less than five years old – are very low.

Unlike extended warranties, mechanical breakdown coverage provides better protection at a much cheaper price. It includes all parts and systems, not just the specific list of items covered by most dealers of extended warranties. It can save you more money because insurers charge only small insurance premiums per each policy period and it also allows you to repair your car whenever you like.

So unless you have this type of coverage, your traditional policy won’t cover transmission repairs, except if the transmission was damaged in an auto accident. For the cost of your transmission to be covered, you must have mechanical coverage, can prove that the damage is due to a recent accident, or have a warranty that covers the damage. If your insurance provider has this coverage, you can bundle your policies for a multi-policy discount.

Policies can cover transmission repairs under specific circumstances and depend on the coverage type being accessed for the claim. Routine care of transmissions and costs related to a lack of care, however, fall solely on the shoulders of the car’s owner.

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