What Is Mechanical Breakdown Insurance (MBI)?

Last Updated on June 2, 2022

Mechanical breakdown insurance is an optional car insurance coverage that works similarly to an extended warranty.

MBI is only available through some insurers on qualifying vehicles. It protects your vehicle against unexpected repairs and replacements outside of accidents and routine maintenance.

What is mechanical breakdown insurance? Is MBI worth it? Keep reading to discover everything you need to know about mechanical breakdown insurance, what it covers, and how claims work.

How Does Mechanical Breakdown Insurance Work?

Mechanical breakdown insurance is an optional insurance add-on that covers unexpected breakdowns.

Available on newer vehicles with a certain number of miles, mechanical breakdown insurance can cover engine and transmission repairs, problems with electrical components, drive axle repairs, and similar repairs.

Your car’s warranty covers these components for a certain number of miles. Once the warranty expires, however, you are not covered by insurance. Some drivers purchase an extended warranty for added coverage. Others purchase mechanical breakdown insurance.

Mechanical breakdown insurance works like any other insurance add-on. You pay extra money to your insurance company for MBI coverage. If you need to make a claim, you pay a deductible and your insurance covers all remaining costs.

What Does Mechanical Breakdown Insurance Cover?

Mechanical breakdown insurance covers:

  • Repairs and replacement parts for unforeseen breakdowns
  • Problems with the powertrain, including the drive axle, transmission, engine components, and electrical components
  • Brake systems, steering, suspension, air conditioning, and other electrical components (typically only covered on premium mechanical breakdown insurance plans)

What Does Mechanical Breakdown Insurance Not Cover?

Mechanical breakdown insurance does not cover:

  • Routine maintenance
  • Wear and tear
  • Damage caused by misuse, abuse, or neglect
  • Accidents
  • Damage caused by improper maintenance or the installation of aftermarket components

You can’t make a claim for oil changes, windshield wiper replacement, or tire rotation through your mechanical breakdown insurance coverage, for example, but you can make a claim for engine repairs and replacements (assuming your engine has broken down).

What Makes Mechanical Breakdown Insurance Unique?

Mechanical breakdown insurance is similar to ordinary car insurance, manufacturer’s warranties, and extended warranties.

Mechanical Breakdown Insurance: Covers repairs and replacement parts for unexpected breakdowns. Does not cover routine maintenance, accident-related damages, or wear and tear.

Car Insurance: Car insurance covers certain unexpected damages, including accident damages, vandalism, theft, and other unexpected events.

Warranty: Included with new vehicle purchases, the warranty covers certain vehicle components up to a certain number of years or miles (whichever comes first).

Extended Warranty: Available on new and used vehicles, an extended warranty lasts longer than an ordinary warranty, covering mechanical breakdowns that would not normally be covered by insurance. You can buy extended warranties from the vehicle manufacturer or from third-party providers like CarShield.

Where to Buy Mechanical Breakdown Insurance

You buy mechanical breakdown insurance through your insurance provider. Most major insurers provide mechanical breakdown insurance, although not all insurers offer it.

Additionally, insurers have different MBI eligibility requirements. Some insurers offer MBI coverage up to a certain number of miles or years, for example. Once your vehicle exceeds a certain limit, you’ll no longer have MBI coverage.

Mechanical Breakdown Insurance Versus Extended Warranty

Mechanical breakdown insurance is similar to an extended warranty. However, there are some differences.

An extended warranty is not an insurance policy. It’s a contract between you and your dealership to cover the cost of certain mechanical breakdowns. You can buy an extended warranty on new or used cars. Extended warranties only cover repairs once the manufacturer’s warranty expires. They don’t cover wear and tear, maintenance-related issues, or accident costs.

Although an extended warranty sounds similar to mechanical breakdown insurance, there are some differences, including:

  • Extended warranties may limit where you can get repairs (although the top extended warranty providers offer some flexibility)
  • Some extended warranty providers pay the repair shop upfront, while others reimburse you for repairs after you pay
  • Some extended warranties offer additional coverage for trip interruption, towing, roadside assistance, fuel delivery, and rental car reimbursement, similar to the roadside assistance packages offered by many car insurance providers
  • Mechanical breakdown insurance is regulated by the state insurance commissioner and, like other insurance products, must comply with insurance law; extended car warranties are not regulated by the state insurance commissioner
  • You can buy an extended warranty for a new or used vehicle; you may only be able to buy mechanical breakdown insurance if your vehicle is, say, fewer than 15 months old

Both extended warranties and mechanical breakdown insurance are contracts that extend coverage over your vehicle to cover more things than normal.

Should I Buy Mechanical Breakdown Insurance?

Mechanical breakdown insurance, like extended warranties, may or may not be the right choice for you.

Your answer depends on your:

  • Aversion to risk
  • Budget

Some people are willing to pay extra for added peace of mind and coverage. Others are not.

No state requires mechanical breakdown insurance. It’s completely optional.

Be careful not to over-insure your vehicle. Some people buy mechanical breakdown insurance for a vehicle that is already protected by a warranty or extended warranty, for example. In this case, you would make a warranty claim before using your mechanical breakdown insurance coverage, making mechanical breakdown insurance redundant.

It’s unlikely you’ll need to make a claim under your mechanical breakdown insurance. Insurers only offer mechanical breakdown insurance on newer vehicles. Newer vehicles are less likely to break down than older vehicles. However, many drivers still buy mechanical breakdown insurance for peace of mind – and to avoid an unexpected and costly repair bill.

How Much Does Mechanical Breakdown Insurance Cost?

The average mechanical breakdown adds $60 to $150 per year to your insurance policy.

Most MBI coverage comes with a deductible of around $250.

Mechanical breakdown insurance is not overly expensive. Remember: it’s unlikely you’ll need to make an MBI claim because you’re driving a new vehicle.

Where to Buy Mechanical Breakdown Insurance

Some major insurers offer mechanical breakdown insurance, while others do not.

GEICO is one of the best-known providers offering mechanical breakdown insurance. It’s available on cars newer than 15 months old with fewer than 15,000 miles on the odometer. You can renew GEICO’s MBI coverage every year, up to a maximum of seven years or 100,000 miles.

Mercury’s mechanical breakdown insurance is called Mechanical Protection. It acts as an extended warranty to cover certain repair work after your vehicle breaks down. It’s available for both new and used vehicles and comes with roadside assistance, trip interruption coverage, and other perks.

AAA, Allstate, American Family, and Progressive also offer mechanical breakdown insurance. State Farm, however, does not offer MBI.

Contact your insurer to ask about MBI coverage.

FAQs About Mechanical Breakdown Insurance

We get plenty of questions about mechanical breakdown insurance and how it works. Here are answers to some of our most common questions.

Q: Does comprehensive coverage cover mechanical repairs?

A: No, comprehensive coverage does not cover mechanical repairs. Comprehensive coverage pays for damage that occurs to your vehicle outside of an accident, including theft, vandalism, windstorm damage, and fire damage.

Q: Which company offers the best mechanical breakdown insurance?

A: GEICO, AAA, Allstate, American Family, Progressive, and Mercury are some of the largest insurers offering mechanical breakdown insurance, and they all offer similar coverage and pricing.

Q: What’s the difference between mechanical breakdown insurance and roadside assistance?

A: Roadside assistance and mechanical breakdown insurance cover different things. Roadside assistance covers tire replacement, fuel delivery, towing, and similar expenses. Mechanical breakdown insurance covers the cost of repairing certain mechanical components of your vehicle, including the drivetrain.

Q: Does car insurance cover mechanical repairs?

A: Ordinary car insurance does not cover mechanical repairs to your vehicle. Car insurance can cover accidents, environmental damage, theft, and vandalism, but it’s not designed to cover mechanical repairs.

Final Word on Mechanical Breakdown Insurance

Mechanical breakdown insurance covers mechanical failures unrelated to car accidents, maintenance, or wear and tear.

The coverage is optional on all vehicles and functions similar to an extended warranty. It covers new vehicles up to a certain limit.

Depending on your budget and aversion to risk, mechanical breakdown insurance may or may not be the right choice for you.

James Shaffer
James Shaffer James Shaffer is a writer for InsurancePanda.com and a well-seasoned auto insurance industry veteran. He has a deep knowledge of insurance rules and regulations and is passionate about helping drivers save money on auto insurance. He is responsible for researching and writing about anything auto insurance-related. He holds a bachelor's degree from Bentley University and his work has been quoted by NBC News, CNN, and The Washington Post.
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