Do I Need Mechanical Breakdown Insurance for My Car?

Mechanical breakdown insurance (MBI) covers repairs to your vehicle if it experiences a mechanical or electrical failure that isn’t covered by auto insurance. Mechanical breakdown insurance is not always necessary, although you may want to consider purchasing it for a car that you plan on keeping for an extended period of time.

Keep reading to learn what MBI does and doesn’t cover and whether you may need mechanical breakdown insurance for your car.

On This Page

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  How Does Mechanical Breakdown Insurance Work?

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  What Is Covered by Mechanical Breakdown Insurance?

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  How Much Does Mechanical Breakdown Insurance Cost?

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  What’s the Difference Between MBI and a Car Warranty?

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  Do I Need Mechanical Breakdown Insurance?

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  Where Can I Get Mechanical Breakdown Insurance?

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  Things To Consider When Purchasing Mechanical Breakdown Insurance

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  FAQs

How Does Mechanical Breakdown Insurance Work?

Mechanical breakdown insurance, also known as car repair insurance, can pay to repair sudden and unexpected damage to your car’s parts and systems. It generally applies if your car breaks down due to an internal failure rather than an external cause. MBI may cover gaps in your car warranty and can be purchased as an alternative to an extended warranty.

You may only be able to purchase and maintain mechanical breakdown insurance for a limited window of time.

For example, GEICO initially offers MBI only for vehicles that are less than 15 months old and have less than 15,000 miles on them. In addition, you can no longer renew your mechanical breakdown insurance with GEICO after driving for seven years or 100,000 miles, whichever comes first.^[1]

These restrictions are in place so that drivers will only get MBI as a precaution rather than buying it for an older vehicle that they already know is prone to breaking down.

What Is Covered by Mechanical Breakdown Insurance?

Mechanical breakdown insurance pays for new parts and labor after your car experiences unforeseen damage that wasn’t caused by an accident or similar peril. MBI usually provides coverage for the following parts of your vehicle:

• Engine, transmission and other powertrain components
• Fuel system
• Exhaust system
• Brakes
• Air conditioning system
• Electrical system
• Computer and other digital components
• Steering system
• Suspension system

What Isn’t Covered by MBI?

Mechanical breakdown insurance won’t cover damage to your vehicle that is already covered by a full coverage car insurance policy. For example, MBI won’t pay for repairs if you crash into a tree because this would be covered by your collision insurance instead. Likewise, MBI doesn’t cover damage from perils like fire or theft since comprehensive insurance already accounts for that kind of damage.

In addition, a mechanical breakdown insurance policy doesn’t cover routine maintenance costs. As a result, you’ll likely have to pay out of pocket if you need an oil change, a fluid or coolant refill, a car tune-up or replacement spark plugs, windshield wipers, brake pads or tires.

Finally, MBI doesn’t cover wear and tear or damage that results from neglect or poor upkeep such as corrosion. It also doesn’t cover intentional damage. If you are caught damaging a part of your car on purpose in an attempt to collect an insurance payout, your MBI policy may be canceled.

How Much Does Mechanical Breakdown Insurance Cost?

In general, the price of maintaining mechanical breakdown insurance ranges from $30 to $120 a year.^[2]The exact cost of your mechanical breakdown insurance will depend on factors like the age and mileage of your car.

Like a regular car insurance policy, mechanical breakdown insurance also comes with a deductible, which is the minimum amount of money you agree to pay toward covered losses before your insurance provider starts chipping in. For example, if you buy MBI from GEICO, the company will cover necessary repairs to the mechanical parts of your car after you pay a $250 deductible.^[1]

What’s the Difference Between MBI and a Car Warranty?

The main differences between mechanical breakdown insurance and an extended warranty include how you obtain and pay for them, how much coverage they provide and where they allow you to get your car repaired after a breakdown.

MBI is similar to an extended warranty in that they both provide coverage for breakdowns that are excluded from full coverage car insurance and typically last for a certain number of years or until you drive a certain number of miles.

Mechanical breakdown insurance is generally a better value than an extended warranty because it is cheaper and offers more flexibility whenever you need a repair. However, an extended warranty could be a useful alternative if you have an older vehicle that is not eligible for mechanical breakdown insurance.

Do I Need Mechanical Breakdown Insurance?

You likely won’t need mechanical breakdown insurance unless you purchase it for a new car that you plan on keeping for several years. Most new cars come with a set of free warranties that may last up to five years. As a result, you may not see the need to purchase the extra coverage provided by MBI if you plan on getting another new vehicle within five years.

However, mechanical breakdown insurance may still be worth buying if you plan to keep your car beyond the factory warranty coverage period.

MBI can fill holes in your warranty’s coverage and pay for repairs that your standard car insurance policy won’t cover. In addition, it is the most cost-effective coverage available for the parts of your vehicle after the vehicle’s warranties have expired.

In general, your MBI will only pay for itself if you experience a breakdown that exceeds the cost of your premium and your deductible. For example, mechanical breakdown insurance provides a substantial financial safety net if you experience an engine failure and require a $10,000 replacement. However, if you only end up needing a few hundred dollars to replace your braking system, then MBI may not have been worth the investment.

Where Can I Get Mechanical Breakdown Insurance?

You can purchase mechanical breakdown insurance from an insurance company like GECIO, Allstate, American Family, Mercury and, if you live in California, Olive. In addition, AAA offers coverage similar to mechanical breakdown insurance through its vehicle protection plans.

Not every company provides the exact same rates and coverage, so it may be worth shopping around to find the best price for your circumstances. For example, Allstate’s Extended Vehicle Care typically comes with a $50 deductible, although the deductible could be as high as $200 depending on your plan.^[4] In any case, that places it well below GEICO’s standard $250 deductible for mechanical breakdown insurance.

Things To Consider When Purchasing Mechanical Breakdown Insurance

When you’re looking into purchasing mechanical breakdown insurance, the most important thing to consider is whether the amount of coverage provided is worth the cost. You should keep an eye out for any exclusions listed in the policy and consider how high your deductible is when deciding if an MBI policy meets your needs.

You also need to consider whether it would be redundant with your car’s factory warranties. When you buy a new car, you should receive coverage for the powertrain for five years or 60,000 miles, while other systems are usually covered for three years or 36,000 miles.^[5] If you want to insure these parts of your vehicle for longer than the warranty’s coverage period, then MBI may be a wise investment for you.

Finally, you should plan for the future by looking into how long you are allowed to renew your policy and whether you could transfer your mechanical breakdown insurance to a different vehicle if your current vehicle is totaled. MBI isn’t necessary for every driver, so it’s important to consider how much value it could provide for you in the long term before you buy a policy.