What Is Mechanical Breakdown Insurance (MBI) and What Does it Cover?

When buying a car, you may find yourself debating what types of insurance and warranties you should get. In this article, we discuss how much Mechanical breakdown insurance costs, if you need it and how it differs from an extended car warranty.

• What is mechanical breakdown insurance?
• Mechanical breakdown insurance vs. extended car warranty
• What does mechanical breakdown insurance cover?
• How much does mechanical breakdown insurance cost?
• Mechanical breakdown insurance plans from insurance companies

What is mechanical breakdown insurance?

Mechanical breakdown insurance (MBI) is an optional coverage for your car that takes care of mechanical breakdowns and repairs. It can provide you with peace of mind after your car's manufacturer's warranty expires.

Mechanical breakdown insurance vs. extended car warranty

There are a couple of different types of warranties and coverages for your car. A new car warranty, also called a manufacturer's warranty, is issued by the car's manufacturer. It typically covers repairs and replacement parts for up to three years. You may be able to purchase an extended car warranty to stretch out your new car warranty or to cover a used car. Here are some important differences to keep in mind:

What does mechanical breakdown insurance cover?

Mechanical breakdown insurance covers repairs to your car after a breakdown that aren't covered by a full coverage auto insurance policy. Full coverage would cover damages from fire, hail, earthquake, theft, vandalism or a car accident, for instance. Mechanical breakdown insurance generally includes repairs to all mechanical parts. An mechanical breakdown insurance policy usually covers repairs to the following parts of a car:

• Exhaust
• Brakes
• Engine parts
• Technical components
• Transmission
• Fuel system
• Cooling systems
• Steering
• Suspension

What isn't covered by mechanical breakdown insurance?

Your mechanical breakdown insurance won't cover maintenance, accident damages, wear and tear or damage caused by a collision. Collision or comprehensive coverage generally covers damage caused by a car accident. Examples of damages or repairs mechanical breakdown insurance won't cover include:

• Maintenance: Tire repairs or rotations, oil changes and tune-ups, for example.
• Accidental damages: Includes damages from hitting a traffic cone, shopping cart or tree.
• Wear and tear: Exterior scratches and interior stains, among other types of wear.
• Collisions: Includes damages involving a crash with another vehicle and the repairs, medical bills and legal defense costs that may result.

Do I need mechanical breakdown insurance?

You may want to buy MBI if you're worried about expensive repairs down the road. If you're wondering whether MBI is worth purchasing, consider how likely it is that your car experiences a breakdown that costs more than your combined deductible and plan price.

Most MBI plans have a $250 deductible, and your plan price could be between $30 to $100 a year. For example, if you have a $250 deductible and your plan price is $50 per year, with your plan covering your car for five years, the breakdown would have to cost more than $500 to fix to be worth it, which is the combined cost of premiums and your deductible. An engine repair, for instance, can cost around $2,500. In this case, MBI would save you $2,000.

Also consider the type of car you own when deciding whether or not to get MBI. A car that is more expensive to repair, like a Tesla or BMW, may benefit from MBI more than a car that's inexpensive to fix, like a Honda or Toyota. However, MBI usually doesn't cover luxury cars. A car that is prone to breakdowns can also benefit from MBI.

Mechanical breakdown insurance for used cars

Most auto insurance companies only offer mechanical breakdown insurance for new or leased cars. If you have a used car, it most likely won't qualify for mechanical breakdown insurance. If you plan to keep your car for a long time, you should consider purchasing mechanical breakdown insurance in order to protect yourself from major repairs down the road. If you do buy a used car, an extended warranty can help pay for repair costs.

Mechanical breakdown insurance cost

To add car repair insurance to your auto policy, it may cost you anywhere from an additional $30 to $100 per year. We found quotes in the Seattle area that listed MBI as an additional $38 per year, with a $250 deductible. Quotes were for a 2018 Honda Civic. Unlike standard auto insurance rates, MBI costs only depend on the year and model of your car. Factors like your driving history or credit score are not considered.

If you have an MBI policy and need to get your car repaired, you would need to report a claim to your insurance provider. The insurer may directly pay the repair shop for covered claims after you pay the deductible.

Best companies for mechanical breakdown insurance

If you've decided to purchase mechanical breakdown insurance, here are a few insurance companies with strong mechanical breakdown coverages.

Mercury's Mechanical Protection

Mercury's Mechanical Protection acts as an extended warranty that covers certain repair work if your car breaks down. This protection is available for both new and used vehicles. The plan also includes 24-hour roadside assistance, rental car assistance, tire protection and trip interruption coverage.

GEICO's mechanical breakdown insurance

GEICO is one of the few major car insurance companies that offers mechanical breakdown insurance. GEICO provides coverage for new or leased cars with less than 15,000 miles and that are less than 15 months old. You can renew mechanical breakdown insurance through GEICO for up to seven years or up to 100,000 miles, whichever comes first.

Key points about mechanical breakdown insurance from GEICO:

• You must pay a $250 deductible on a covered loss.
• Covers repairs to all mechanical parts except maintenance and wear and tear.
• You're charged a small premium per policy period instead of a large amount up front.
• You can use the repair shop of your choice.

Is GEICO's mechanical breakdown insurance worth it?

Considering that GEICO's mechanical breakdown insurance covers repairs to all mechanical parts, their coverage can be very useful in the event of a breakdown. For mechanical breakdown insurance to be worth it, your repairs would need to exceed the total price of the insurance and the $250 deductible. You should only get mechanical breakdown insurance if you plan to keep your vehicle for more than a few years. Another factor to consider is mileage. If you recently bought a new car and drive over 34,000 miles in a year, there is no point in getting the insurance since GEICO only insures the vehicle up to 100,000 miles, and a manufacturer's warranty typically covers repairs for up to three years. In this case, Geico's mechanical breakdown insurance and the manufacturer's warranty would completely overlap.

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