What Exactly Is Mechanical Breakdown Coverage?
Mechanical breakdown insurance pays for automobile repairs and breakdowns that are not caused by an accident. Coverage begins when your manufacturer’s warranty no longer covers damaged parts.
Mechanical Breakdown Insurance: Definition and Examples
Mechanical breakdown insurance covers the costs of repairing, replacing, or servicing operational or structural automobile failures that are not the result of an accident. This coverage covers problems that are not covered by your manufacturer’s warranty or those are not covered by a basic motor insurance policy. 1
Car repair insurance is an alternative moniker.
MBI is an acronym.
Assume you’re driving down the road and suddenly find yourself unable to change gears. You perform diagnostics and learn that your transmission is broken. Your manufacturer’s warranty has already expired, and your motor insurance policy does not cover repairs that are not the result of an accident. Mechanical breakdown insurance comes into play here.
You merely pay a deductible, and your insurance covers for the transmission repair materials and labor.
What is Mechanical Breakdown Insurance?
Mechanical breakdown insurance covers the expense of repairing abrupt and unexpected component failures in your vehicle. This coverage is not offered by all insurance providers, and those that do frequently offer it as an add-on. Some financial organizations, like as banks and credit unions, may also sell mechanical breakdown insurance policies. 2
Mechanical breakdown coverage is not available for all vehicles. In general, your vehicle must be relatively new, and the insurance provider will set an age and mileage restriction.
Geico’s MBI coverage, for example, is available for new or leased automobiles that are less than 15 months old and have less than 15,000 miles on the odometer. You may extend your coverage for another seven years or 100,000 miles, whichever comes first. 3
Insurance companies prefer that you utilize an authorized repair shop since they often guarantee a 12-month or 12,000-mile warranty on all components and labor from the date of service.
Some mechanical breakdown insurance policies may include additional benefits at no additional cost, such as:
If you have an MBI coverage, you may be entitled to 24-hour emergency roadside assistance.
Transferable coverage: Some insurers will allow you to transfer your MBI policy (once) to someone who purchases your vehicle while the policy is still active.
Guaranteed lifetime deductible: You will not be charged a deductible for a second or subsequent failure of the same component.
Alternative transportation reimbursement: If you must leave your automobile at the repair facility, your insurance may pay the expense of renting a car.
What is covered under mechanical breakdown insurance?
Distinct mechanical breakdown insurance policies have different agreements that normally expire after a certain amount of time or a certain number of miles. Different degrees of protection are often available from the same supplier. 2
A mechanical breakdown coverage may cover the following, depending on the plan:
The engine, gearbox, and all driving axles comprise a vehicle’s powertrain.
Aside from the engine, core systems are your vehicle’s essential electrical and mechanical systems. Brakes, suspension, steering, engine cooling, fuel system, and electrical components are among them.
Comfort and technology: These are components that improve the comfort and safety of your car, such as air conditioning and heating, convenience technology such as power seats and entertainment systems, and safety technology such as automated braking systems.
Some MBI plans may also cover lost or broken key fobs, cracked windshields, paintless dent repairs, or road hazard tire damage.
Here’s how different forms of insurance will handle certain circumstances.
Mechanical breakdown insurance does not cover non-collision losses. Understand the coverage exclusions in your insurance by reading the small print.
How Much Does Mechanical Breakdown Insurance Cost on Average?
A mechanical breakdown insurance policy’s cost is heavily influenced by the brand and model of the vehicle. Your premium rate will be affected by your car’s age, odometer reading, contract term, and the kind of repairs covered. As your automobile ages or accumulates more miles, you might expect to pay a higher premium.
Mechanical breakdown insurance costs range between $100 and $200 per year, depending on the provider, coverage, and car type. A greater deductible, like any other form of insurance, decreases your MBI price.
Is Mechanical Breakdown Insurance Necessary?
Purchasing an MBI coverage when your automobile is still new may save you money in the long term. Even if you drive your automobile on a daily basis, you’ll still be within the mileage limits of your manufacturer’s warranty. You won’t have to pay for unexpected repair bills out of pocket if you have mechanical breakdown insurance.
Let’s run some figures to put things in context.
Assume you have a $700 three-year premium on a mechanical breakdown insurance coverage. Assume you need to repair the head gasket on your 2021 Ford Explorer, which costs $2,000 to replace. MBI will save you more than half the cost of replacing the head gasket.
What Is the Difference Between MBI and Extended Warranty?
Mechanical Breakdown Protection
Car Warranty Extension
A legal agreement between you and an insurance provider.
A legal agreement between you and a vehicle dealer.
The state insurance department regulates it.
The state department of insurance has no jurisdiction over them.
offered to newly purchased autos
Covers high-mileage automobiles as well.
When you purchase an extended automobile warranty, you may believe you are purchasing car insurance. They are diametrically opposed. The primary distinction is that MBI is sold by an insurance provider, while an extended warranty is offered by a vehicle dealership. MBI plans may also be sold via insurance agencies, banks, and credit unions.
To qualify for mechanical breakdown insurance, you must have a relatively new automobile with less than 15,000 miles on it. In contrast, your dealer may provide an extended warranty for a car with a greater mileage.