Mechanical Breakdown Insurance: What Is It, and How Does It Work?

One of the biggest risks of owning a car is sudden mechanical failure, and the worst part is it can happen at any time. While your car's parked in the garage, or while you're out driving, mechanical failure such as a busted engine, or transmission can lead to significant repair or replacement costs. 

Unfortunately, the standard auto insurance with collision, and comprehensive coverage usually does not cover the repair or replacement expenses of mechanical failure unless it's caused by an accident, or another covered peril. However, by adding mechanical breakdown insurance (MBI) to your policy, you may be able to get coverage for eligible sudden mechanical failures that your standard auto insurance wouldn't cover. 

Here's the catch though, even MBI has limits, but it does add an extra layer of protection. So, to help you decide whether you should get it, this guide explains what it covers, how it works, how much it costs, and whether it's worth having. 

What is Mechanical Breakdown Insurance (MBI)?

Mechanical breakdown insurance (MBI) is an optional auto insurance coverage that helps pay for repairs or replacement of major vehicle components when they unexpectedly fail due to a covered mechanical or electrical breakdown. Depending on your policy, MBI may help cover components such as the engine, transmission, drivetrain, air conditioning and electrical systems. It provides an extra layer of financial protection against unexpected car repair bills that standard auto insurance typically does not cover.

How Does Mechanical Breakdown Insurance Work?

Mechanical breakdown insurance works similarly to other optional auto coverages. You add MBI to your policy and pay an additional premium for the protection. Then, if your car experiences a mechanical or electrical failure covered under your policy, MBI helps pay for eligible repair or replacement costs once you've met your deductible. 

Here's how MBI generally works: 

Add MBI to your auto insurance policy: If you're eligible, you add MBI to a policy that includes collision or comprehensive coverage and pay an additional premium for the protection. 

A covered component breaks down: Your car experiences an unexpected mechanical or electrical failure involving a component covered by your MBI policy. 

Take your car for repairs: You take your car to an auto repair shop, which may need to be approved by your insurer. 

File a claim: You report the breakdown to your insurance company and provide the required information about the repair. 

Pay your deductible: You pay the deductible specified in your MBI policy. 

Your insurer pays eligible costs: Your insurer helps pay the covered repair or replacement expenses according to your policy's limits and conditions.

The exact process can vary by insurer, including where you can have your car repaired, how claims are handled, and what documentation is required. So, if you need to be sure, it's best to discuss it with your insurer. 

If you're considering MBI coverage for your car, an insurance agency can help you explore your options and determine whether it's available with your auto insurance policy. If you're shopping for MBI coverage, then you might as well get started with a free auto insurance quote today.

What Does Mechanical Breakdown Insurance Cover?

Mechanical breakdown insurance generally covers the cost of repairing or replacing specific mechanical and electrical components when they experience an unexpected breakdown. The exact components covered can vary by insurer and policy. According to WalletHub, and Car and Driver, MBI commonly covers car components such as:

• Engine 
• Transmission 
• Drivetrain 
• Exhaust 
• Brakes 
• Electrical
• system 
• Steering and suspension 
• Air conditioning 
• Fuel system 
• Cooling system

Coverage varies between MBI policies, so not every insurer covers the same components or repair costs. Check your policy to confirm which parts and breakdowns are covered before relying on MBI to pay for a repair.

What Does Mechanical Breakdown Insurance Not Cover?

Mechanical breakdown insurance does not cover every type of car repair. While MBI can help with eligible mechanical and electrical failures, it generally does not pay for routine maintenance, normal wear and tear, or problems caused by excluded events.

• Common exclusions may include: 
• Routine maintenance: Oil changes, tire rotations, fluid changes, brake servicing, and other regular maintenance are generally not covered. 
• Normal wear and tear: Parts that gradually wear out through normal use, such as brake pads, tires, and wiper blades, are generally excluded. 
• Pre-existing problems: Mechanical or electrical problems that existed before you purchased MBI may not be covered. 
• Accident-related damage: Damage caused by a collision is generally handled through collision coverage rather than MBI. 
• Weather and other covered perils: Damage caused by events such as fire, theft, vandalism, or severe weather may fall under comprehensive coverage instead of MBI. 
• Negligence or misuse: Repairs resulting from improper maintenance, misuse, racing, or other excluded activities may not be covered. 
• Cosmetic damage: Dents, scratches, paint damage, and other cosmetic issues are generally outside the scope of MBI.

When Do You Need Mechanical Breakdown Insurance?  

Mechanical breakdown insurance can be useful if you want additional protection against unexpected repair bills after your car's original warranty expires. It may be worth considering if you own a newer car that is no longer covered by a manufacturer's warranty, you want protection against costly repairs, or want more predictable out-of-pocket costs for covered mechanical failures. 

You may want to consider MBI if: 

• Your manufacturer's warranty has expired: MBI can provide additional protection after your original warranty ends, depending on your car's age, mileage, and the insurer's eligibility requirements. 
• You want protection from expensive repairs: Major repairs involving the engine, transmission, or other components can be costly, and MBI may help reduce your out-of-pocket expenses for covered breakdowns. 
• You plan to keep your car for several years: If you intend to keep your car beyond its warranty period, MBI can provide additional protection against eligible mechanical and electrical failures. 
• You prefer predictable repair costs: Paying an MBI premium and deductible may be preferable to facing a large unexpected repair bill. 
• You don't have an extended warranty: MBI can be an alternative way to obtain additional mechanical breakdown protection, depending on your needs and available coverage.

However, MBI isn't necessary for everyone. If your car is still covered by a comprehensive manufacturer's warranty, you may already have protection against many mechanical defects. Likewise, if the cost of MBI is high compared with your car's potential repair costs, paying for repairs yourself may make more financial sense.  

What Do You Need to Get MBI Coverage?     

To get mechanical breakdown insurance, your car generally needs to meet the insurer's eligibility requirements. These requirements can vary by insurer and state, but car age, mileage, ownership, and existing coverage are some of the factors that may determine whether you qualify. 

Here's the eligibility requirements to get MBI coverage according to ValuePenguin, and industry sources: 

• Car Age and Mileage Limit: In some states, your car must be less than 15 months old and have fewer than 15,000 miles when you purchase MBI. In other states, the eligibility limit may be less than 36 months old and fewer than 36,000 miles. 
• Car condition: Your car generally must be in good condition when you purchase MBI. Existing mechanical problems or pre-existing damage typically aren't eligible for coverage. 
• Ownership: Some insurers require you to be the first owner of the car to qualify for MBI, although this requirement may not apply in every state. 
• Required auto insurance coverage: MBI generally needs to be added to an existing auto insurance policy rather than purchased as a standalone policy. Depending on the insurer, your policy may need to include collision or comprehensive coverage.
• Renewal: You can renew MBI coverage for up to seven years in some cases, while some states may allow coverage for up to 10 years. Coverage may also be subject to a mileage limit of up to 100,000 miles, with the coverage ending when the applicable time or mileage limit is reached, whichever comes first.

How Much Does Mechanical Breakdown Insurance Cost?      

According to MarketWatch and the Zebra, the cost of mechanical insurance can range from $30 to $100 per year, which is about $2.5 to $8.3 per month with a common deductible of $250.  

If you compare it with the cost of standard auto insurance, MBI is generally an inexpensive way to add mechanical breakdown protection to your policy. For a relatively small additional premium, MBI can provide an extra layer of financial protection against eligible repair costs that standard auto insurance typically doesn't cover.   

Is Mechanical Breakdown Insurance the Same as a Car Warranty?   

No, mechanical breakdown insurance and a car warranty are not the same, although both can help cover certain repair costs. MBI is an optional coverage you add to an auto insurance policy, while a car warranty is a separate agreement that covers specific repairs or defects for a certain period or mileage. 

The main difference is how the coverage is provided and what it is designed to protect. MBI is offered through an insurance policy and can help cover eligible mechanical or electrical breakdowns, while a manufacturer's warranty generally covers defects in materials or workmanship for a specified period or mileage. 

According to MarketWatch, a manufacturer's warranty commonly lasts 3 years/36,000 miles or 5 years/60,000 miles, depending on the manufacturer and warranty terms. Some manufacturers also offer longer powertrain warranties with different time and mileage limits. 

An extended car warranty can provide protection beyond the original manufacturer's warranty, but it is also different from MBI. Understanding these differences can help you decide when to use your warranty and when to file an MBI claim.  

Difference Between MBI and Car Warranties

Although mechanical breakdown insurance and car warranties can both help with certain repair costs, they differ in how they are purchased, what they cover, and how long the protection lasts. The table below highlights the key differences between MBI and a manufacturer's warranty.

MBI Coverage vs. Extended Car Warranty 

When it comes to protecting yourself against unexpected mechanical repair costs, you generally have two options: choose MBI coverage or purchase an extended car warranty. Depending on your needs, you may also choose to have both. 

But if you had to choose between the two, which option makes more sense? Cost is one factor to consider. According to ConsumerAffairs, an extended car warranty can cost around $600 to $1,000 per year, while more comprehensive protection may cost significantly more. In comparison, MBI typically costs around $30 to $100 per year. 

However, cost isn't the only factor to consider. Here's how MBI compares with an extended car warranty across key factors.