Owning a car can come with a lot of expenses, including unexpected mechanical repairs. Mechanical breakdown insurance (MBI) can cover the cost of expensive mechanical failure not caused by regular wear and tear, and it can be useful for drivers whose manufacturer warranties have expired, although it may not always be cost-effective.
MBI is an optional coverage you can add to your policy to cover costly repairs related to mechanical failure that aren’t covered by a standard car insurance policy. Leaky engines, damaged hardware, and electrical system issues would all be covered by MBI.
However, not all car insurance companies offer mechanical breakdown insurance, and those that do may require your car to be under a certain age or below a certain amount of mileage in order to be eligible.
What is mechanical breakdown insurance?
Mechanical breakdown insurance (MBI) covers auto repairs due to mechanical failure not caused by a car accident or another peril typically covered by car insurance. This can include everything from your engine and transmission to electrical system issues, but insurers typically exclude regular maintenance and wear and tear from their MBI coverage.
Mechanical breakdown insurance also may not cover replacements associated with mechanical repairs including new brake pads, coolant, or wiper fluid. And not every car insurance provider offers MBI. Those that do will add it to your policy, but at a cost — MBI can significantly increase your monthly premium.
You might consider adding mechanical breakdown insurance to your policy if your car is less than a few years old or if the make and model of your car is prone to mechanical issues. You may save hundreds of dollars on car repairs by choosing MBIs, but you may also end up paying for more than what you need, so it’s best to consider all your options before you decide.
What does mechanical breakdown insurance cover?
Mechanical breakdown insurance covers repairs to all mechanical parts of the car, excluding maintenance or regular wear and tear. That may include repairs to any of the following:
Engine: Hot water valve, exhaust manifold, belt tensioner
Drive axle: Broken axle replacement
Steering: Steering wheel, control valve and sensor, tie rods and ends
Brakes: Wheel cylinders, combination valve, control sensors
Electrical: Igniter, horn and horn relay, factory-installed theft alarm system
Suspension: Air suspension compressor, radius arm and bushing, mode selector switch
Fuel system: Diesel or gasoline fuel injectors, vacuum pump
Air conditioning: Air registers, control cables, pressure switches
Audio center: CD player, sound system and radio
Hardware: Windows, doors, and hood
Transmission and transfer case: Electronic shift control and four wheel drive actuator
For a full description of what your insurer’s MBI coverage includes, you should speak with your insurance company directly.
Some MBI coverage may come packaged with roadside assistance which can include towing and lost key/lock-out services, or rental car reimbursement which covers the cost of a replacement car while your car is in a repair shop. Roadside assistance is a typical car insurance offering, and you can add it to your policy whether or not your insurer offers MBI.
What is not covered by MBI?
Mechanical breakdown insurance will not cover damage to your car that was caused by an auto accident. Comprehensive and collision coverage can cover repairs to your vehicle after an accident or if it’s damaged by a non-driving peril like extreme weather, theft or vandalism.
Routine maintenance and general wear and tear are also excluded from MBI. This includes damage from corrosion and rust, worn brakes and tires, wheel balancing, engine tune-ups, and tire rotation. However, different car insurance providers define “maintenance” and “wear and tear” differently, so you should check with your insurer to clarify.
How much does mechanical breakdown insurance cost?
There is no set price for adding mechanical breakdown insurance to your policy. Each carrier has their own price, and costs will also vary depending on the details of your policy, but you can compare rates from multiple companies to find affordable coverage.
You may need to pay a deductible when you file an MBI claim. At GEICO, for example, you’ll have to pay a $250 deductible on a covered loss before mechanical repairs can be made.
Who has the best mechanical breakdown insurance?
Many major car insurance companies offer MBI, as well as some smaller, regional companies. Some companies offer a variation of MBI, such as a vehicle service contract, or equipment breakdown coverage. Companies that offer MBI, in some form, either director or through a third-party, include:
Is mechanical breakdown insurance worth it?
Mechanical breakdown insurance is totally optional and is not required in any state. Not every insurance company offers it, either, and those that do offer it may only extend the protection to new cars or cars below a certain mileage amount.
Certain makes and models of car may be excluded from mechanical breakdown insurance altogether. MBI risks costing more over time than you wind up saving, but for some drivers who would rather pay more for peace of mind, it may be a good option.
However, MBI isn’t the only type of protection that can cover the mechanical repairs not covered by standard full-coverage car insurance. Manufacturer warranties can also cover repairs, and once your manufacturer warranty is up, an extended warranty is another option.
MBI vs. extended warranties
New cars come with an original manufacturer warranty, also called a factory warranty, which typically covers repairs for the first three years of the car’s life or up until a certain number of miles, whichever comes first.
An extended warranty is a separate product, purchased from a dealer or third-party seller, that offers continued coverage for mechanical issues after the manufacturer’s warranty has expired.
A manufacturer warranty typically offers repairs for three years or 36,000 miles, while an extended warranty may offer repairs for five years/60,000 miles or eight years/120,000 miles. If you’re considering purchasing an extended warranty, you should shop around and compare cost and coverage options just like you would if you were shopping for car insurance coverage.
Although the terms are sometimes used interchangeably, mechanical breakdown insurance is handled between you and your auto insurance company, while extended warranties are purchased through a dealer or a third-party.
There may also be a difference in what each covers, an extended warranty may not cover the same scope of repairs that would be covered by your insurer’s MBI.
An extended warranty can cost hundreds of dollars a year and can make sense for drivers with older cars or cars prone to mechanical issues. However in many cases, drivers wind up paying more for their extended warranty than they’ll get back in covered repairs.
Emergency repair funds
Whether or not you get an extended warranty or mechanical breakdown insurance, you should also consider creating an emergency repair fund for any car issues that might come up unexpectedly. For an emergency repair fund, you should set money aside every month in case you need it to pay for unforeseen mechanical repairs.
According to AAA, an average car repair bill can cost between $500 and $600, so setting $50 a month aside in an emergency repair fund can help you save enough money for future mechanical issues  .
If you have a warranty then repairs are covered, and if your car has required few mechanical repairs in the past, an emergency fund could be a cheaper alternative to mechanical breakdown insurance.