What Is Mechanical Breakdown Insurance? Key Insights And Considerations

Discover the ins and outs of Mechanical Breakdown Insurance (MBI), a supplementary coverage option offered by some car insurance policies.

Mechanical breakdown insurance(MBI), also known as car repair insurance, provides an additional safeguard for your auto insurance policy.

Comparable to a car warranty, this coverage handles expenses for repairs if your vehicle experiences a breakdown, requires replacement parts, or encounters other mechanical issues.

With this type of insurance policy, you could potentially reduce your out-of-pocket expenses for unforeseen car repairs.

Key Points to Remember:

  • Mechanical breakdown insurance shields you from significant repair expenses in case of major system failures like the powertrain.
  • MBI resembles an extended warranty but varies in terms of duration and qualifying vehicles.
  • Policy costs for MBI typically range from $30 to $100 annually.
An Infographic on Mechanical Breakdown Insurance

How Does Mechanical Breakdown Insurance Operate?

Mechanical breakdown insurance steps in to cover vehicle repair costs following major mechanical failures, excluding those resulting from auto accidents.

It’s an optional add-on available with select car insurance policies.

While akin to an extended warranty, MBI typically comes at a lower cost.

If you’ve experienced the sticker shock of a significant car repair bill, you understand how daunting parts and labor expenses can be.

However, before opting for MBI coverage on your car insurance policy, consider a few key factors.

Also Read: Can I Get Car Insurance Without Registration? Navigating the Maze of Requirements

What Does Mechanical Breakdown Insurance Include?

MBI covers repairs for critical vehicle components, encompassing:

  • Transmission
  • Engine
  • Drive axle
  • Steering
  • Emissions
  • Exhaust
  • Suspension
  • Air conditioning and heating

However, routine maintenance tasks such as oil changes, tune-ups, fluid additions, and replacements of brake pads, filters, tires, or spark plugs are not covered.

Also Read: Exploring UCare: A Closer Look at Medicare Coverage

Is Mechanical Breakdown Insurance Necessary?

The necessity of  this insurance hinges on your ability to handle substantial repair bills comfortably.

In April 2023, the average repair cost hovered around $550, based on Kelley Blue Book data.

Yet, this figure represents only the average, with some repairs costing significantly more.

Moreover, vehicle repair costs saw a 19.8% increase in June 2023 compared to the previous year, according to the U.S. Bureau of Labor Statistics.

Additionally, the need for an MBI policy depends on whether you already possess an extended car warranty, also known as a vehicle service contract.

Given the considerable coverage overlap between MBI and extended warranties, if you already have either your original manufacturer warranty or an extended warranty in place, MBI may not be necessary.

What’s the Cost of Mechanical Breakdown Insurance?

Mechanical breakdown insurance (MBI) typically comes at a lower cost compared to extended car warranties, ranging from $30 to $100 annually.

Various major car insurance providers offer MBI as an optional add-on for your auto insurance policy.

Let’s break down the typical prices for each, although costs may vary based on your vehicle and the provider.

Type of Coverage Term Cost per Year Total Cost
Mechanical breakdown insurance 7 years/100,000 miles $100 $700
Extended warranty 3 years/35,000 miles $819 $2,457

 

Extended car warranties can surpass $3,000, making MBI potentially more cost-effective.

However, extended warranties often provide more comprehensive coverage for a wider range of vehicles, especially those with higher mileage.

Mechanical Breakdown Insurance vs. Extended Car Warranties

While MBI and extended warranties share similarities, they differ in several key aspects:

Vehicle Eligibility:

MBI is typically available for vehicles with low mileage, around 15,000 miles.

However, some third-party warranty companies offer plans for vehicles with up to 300,000 miles.

Term Length:

MBI policies generally offer longer terms than extended warranties. For example, Geico’s MBI plan covers up to 7 years/100,000 miles, while car warranties often cover fewer years and miles.

Cost:

MBI costs vary but typically range from $30 to $100 per year, totaling $210 to $700 for a 7-year plan.

In contrast, the median cost for an extended car warranty is around $2,458.

Deductible:

The deductible for MBI, like Geico’s, is typically $250, while extended car warranties may have deductibles ranging from $100 to $500.

MBI policies and extended car warranties provide protection for vehicle breakdowns, but they differ in coverage and cost.

MBI offers lower costs but less coverage compared to extended warranties.

When Should You Consider Mechanical Breakdown Insurance?

If you own a new car with under 15,000 miles and are concerned about potential repair costs, MBI could be beneficial.

Newer vehicles with lower mileage often experience fewer mechanical issues, although they may have pricier high-tech components to repair.

MBI pays off if repair costs exceed the premium and deductible.

For instance, if you’ve paid $100 per year for MBI for three years and face a $600 air conditioning repair, your total MBI cost after paying the $250 deductible would be $550, saving you $50 on repairs.

Ultimately, whether you opt for MBI depends on factors like peace of mind, premium, and deductible.

If you own a newer vehicle with low mileage and prefer knowing that major car issues might only require the deductible amount, then MBI could be a suitable choice.

However, if your vehicle is older with higher mileage or you have sufficient savings for repairs, MBI may not be necessary.

Which Insurers Provide Mechanical Breakdown Insurance?

Several prominent car insurance companies offer mechanical breakdown insurance, including Geico, Progressive, and Mercury Insurance.

Geico

It stands out as one of the major carriers providing mechanical breakdown insurance.

Geico customers can easily add this coverage to their policy.

Geico’s MBI is applicable to new or leased vehicles less than 15 months old and with fewer than 15,000 miles.

It’s renewable for up to 7 years/100,000 miles, whichever comes first.

Geico’s MBI covers all parts and systems, offering flexibility to choose any repair facility, not limited to approved lists.

Progressive

Progressive’s Good Sam’s mechanical repair plan extends coverage to cars, trucks, or RVs.

Eligibility requires the vehicle to be within 15 model years and have fewer than 100,000 miles.

Deductibles range from $100 to $500, and you can obtain a free quote online.

Mercury Insurance

Mercury Insurance stands out by offering mechanical breakdown insurance for both new and used vehicles.

In addition to MBI, Mercury’s mechanical protection includes perks like roadside assistance, trip-interruption coverage, rental vehicle assistance, and road hazard tire protection.

Customers can add MBI to their policy by consulting with a Mercury agent.

Wrapping Up

Mechanical breakdown insurance steps in to cover expenses stemming from major mechanical failures, distinct from those resulting from auto accidents.

This coverage safeguards critical systems such as the transmission and engine, which can entail substantial repair costs.

Often added to existing car insurance policies, mechanical breakdown insurance offers affordability, with premiums typically ranging from $30 to $100 annually.

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