Is mechanical breakdown car insurance worth it?
Why you can trust The Zebra
Mechanical breakdown insurance (MBI) is an auto insurance coverage option that covers repairs to all mechanical parts of a new vehicle damaged in circumstances other than a collision. If a vehicle's AC compressor is damaged and it needs to be replaced, a standard insurance policy would not cover it — but mechanical breakdown coverage would.
Because MBI is optional, you should think carefully about whether or not you require this additional coverage when checking out quotes. Let’s outline pros and cons of mechanical breakdown coverage and highlight the companies that provide it.
Technically speaking, there is no single coverage called car repair insurance. The term car repair insurance could actually be applied to any insurance policy that offers auto repair to your vehicle. MBI is one such form of this coverage, as are collision and comprehensive coverage, as these forms cover damages to your vehicle. These forms are different, however, as mechanical problems — such as issues with the drivetrain — aren't typically covered by collision or comprehensive coverage, but are often covered by MBI.
Any covered repairs will usually be specified on your insurance policy. Policyholders should consult their car insurance company to address questions regarding covered perils or whether or not repair coverage — or a protection plan — can be added on top of the factory warranty. Ultimately, the type of insurance you choose depends on many factors, including whether you drive a new or used car as well as the scope of the service contract offered by your dealership. While not a specific type of coverage, car repair insurance can be a smart option, especially if it minimizes the hit you take at the repair shop.
Mechanical breakdown insurance covers vehicular damage occurring outside of a car collision. Much like comprehensive or collision coverage, MBI is subject to variable deductibles. In order for mechanical breakdown insurance to provide coverage, the value of repair costs needs to be greater than the policy's deductible. A typical mechanical breakdown deductible is $250.
Typically, the following parts can be covered by MBI:
What is not covered?
Most new vehicles come with a car warranty lasting between one and three years. An extended warranty is exactly what it sounds like — it extends the vehicle's warranty beyond its original expiration date. While details may vary based on the dealership and the vehicle, mechanical breakdown insurance may overlap with an extended warranty.
There are a few key differences between mechanical breakdown coverage and an extended warranty. MBI allows you to choose the repair facility you'd like to use — with an extended mechanical warranty, you must use the approved repair facility in order for the warranty to cover the costs. Another difference includes the way you pay for and purchase the products. Extended warranties are often paid for with lump sum fees and can be relatively pricey up front. Mechanical breakdown insurance costs are added to insurance premiums as a monthly fee.
Like much in the insurance industry, deciding which option is best for you depends on your needs. Not every auto insurance company provides mechanical breakdown coverage. If they do, it may be offered through a third party.
Let’s break down some of the companies providing mechanical breakdown insurance coverage in some form or another.
GEICO is one of the biggest providers of mechanical breakdown insurance. GEICO's mechanical breakdown coverage is for new or leased vehicles with less than 15,000 miles, purchased within the past 15 months. Once you have this coverage, it may remain active for up to seven years or 100,000 miles.
Below are damages covered and not covered by GEICO’s mechanical breakdown insurance.
The cost of MBI will depend on the value of your vehicle. As such, GEICO does not advertise standard mechanical breakdown coverage costs. Although independent sources claim GEICO's coverage is expensive, GEICO states its MBI costs “pennies per day.”
Mercury Insurance offers its own MBI plan, called Mercury Mechanical Protection. This operates like an extended warranty, with a few tiers of coverage. Mercury's platinum plan has the highest level of coverage, covering nearly all mechanical and electrical claims. Below is what is included in each tier.
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The platinum eliminates any exclusions from the gold, silver, and cooper plans. In addition to the coverage above, Mercury also offers the following coverage options:
Managed and serviced by Assurant Solutions, USAA’s option for MBI is called Extended Vehicle Protection. While less specific about its coverage option than GEICO, USAA’s MBI program applies to the failure of a covered fault under normal and usage of the vehicle. There are three main qualifications your vehicle must meet:
Although they do not specifically state what is and is not covered, Assurant and USAA program offers additional coverage such as roadside assistance, car rental services, and overnight expenses. This is in addition to their mechanical breakdown coverage options.
Once your vehicle’s original dealership warranty expires, you will no longer be eligible for USAA’s MBI coverage. Because it is managed by Assurant rather than USAA, you will be dealing with their customer service and claims team. Assurant does not state how much this coverage will cost.
That is up to you. If you want additional peace of mind MBI could be worth the cost.
Consider the following before purchasing a mechanical breakdown policy:
The best way to answer these questions is to contact an insurance agent. Do your research to learn if this optional policy is one you should consider. If you’re looking for further information related to optional coverages and car insurance, see below.
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The Zebra is not an insurance company. We publish data-backed, expert-reviewed resources to help consumers make more informed insurance decisions.