Mechanical Breakdown Insurance

Is mechanical breakdown car insurance worth it?

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What is mechanical breakdown insurance?

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. Let’s outline pros and cons of mechanical breakdown coverage and highlight the companies that provide it.

  1. What is mechanical breakdown insurance?
  2. Mechanical breakdown coverage vs. extended warranty
  3. GEICO mechanical breakdown insurance
  4. Mercury mechanical breakdown insurance
  5. USAA mechanical breakdown insurance
  6. Is MBI worth it?

 

What does mechanical breakdown insurance cover?

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:

  • Engine
  • Transmission
  • Exhaust
  • Air conditioning
  • Technical components, computer

What is not covered?

  • Tune-ups
  • Oil changes
  • Tire repair or rotation
  • Intentional damage
  • Damage caused by misuse

 

Mechanical breakdown insurance vs. extended mechanical warranty

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.

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 mechanical breakdown coverage

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.


Covered damage:
  • Cooling systems
  • Suspension
  • Steering
  • Transmission
  • Drive axle engine
Not covered:
  • Regular maintenance services such as changing brake pads, spark plugs, air filters, tires, or tune-ups, suspension alignment, and wheel balancing.
  • Any damage that is intentionally caused or caused by misuse
GEICO mechanical breakdown cost:

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 mechanical breakdown coverage

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.

Coverage OptionGoldSilverCopper
Engine failureYesYesYes
Transmission and transfer caseYes Yes
Drive axleYes Yes
SteeringYesYes 
BrakeYesYesYes
SuspensionYesYes 
ElectricalYesYesYes
Fuel systemYesYes 
Air conditioningYesYesYes
Audio centerYes  
HardwareYes  


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:

  • 24/7 roadside assistance
  • Rental vehicle assistance
  • Tire protection
  • Trip interruption coverage
  • Auto deductible reimbursement (platinum only)

 

USAA mechanical breakdown insurance

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:

  • Vehicle needs to be younger than 10 years old
  • Less than 250,000 miles
  • Be covered under its original dealership warranty

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.


Is mechanical breakdown insurance worth it?

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:

  • How much does this coverage cost compared to the out-of-pocket cost?
  • Will filing an MBI claim increase my premium?
  • Does my company offer this or is it through a third party?
  • Is my existing warranty sufficient?

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.

If you want to see quotes from different companies based on your driving profile, enter your ZIP code below!

 

Find affordable auto insurance today!

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