Buzz
For many, cars are indispensable in daily life. Approximately 75% of Americans commute to work by car, and around 90% rely on their vehicles for grocery shopping. Despite the skyrocketing costs of cars, including used models, they remain a necessity for most people.
A vehicle breakdown isn’t just a minor hassle—it can be a full-blown emergency for many. Repair costs can be overwhelming, and if you’re unable to cover them, it disrupts everything from your job to daily errands like grocery shopping. If the thought of a car failure stresses you out, mechanical breakdown insurance (MBI) might be worth considering.
Understanding Mechanical Breakdown Insurance
Standard auto insurance policies exclude coverage for mechanical failures. Mechanical breakdown insurance safeguards key components of your vehicle, such as the engine, transmission, drivetrain, brakes, and electrical systems. Coverage varies by policy, with some offering broader protection or specific exclusions. Routine maintenance like tune-ups, fluid changes, tire replacements, or wear-and-tear parts such as brake shoes are typically not included. Policies differ, so exclusions should be reviewed carefully. MBI can be added as an endorsement to your current insurance or purchased as a standalone policy.
Pricing
Mechanical breakdown insurance is generally more affordable than extended warranties for newer vehicles, with annual premiums ranging from $30 to $100—compared to extended warranties that can cost thousands. MBI includes a deductible, often around $250. Given that the average car repair costs approximately $550 (and major repairs like fuel pump replacements can surpass $1,000), MBI offers significant value, especially for vehicles without any warranty coverage.
Qualification
MBI is typically available for newer vehicles—usually those under 15 months old with fewer than 15,000 miles. Once enrolled, coverage can often be extended—commonly up to seven years or 100,000 miles, though terms vary by insurer. It’s essential to consult individual providers for precise eligibility details.
Even if you own an older or used vehicle, MBI remains an option. For instance, Good Sam provides standalone MBI for cars up to 10 years old with under 100,000 miles, while Mercury Insurance covers vehicles up to seven years old with fewer than 100,000 miles. Be aware that many MBI policies terminate coverage once your car reaches a certain age or mileage limit. For example, if your car has 90,000 miles and the policy ends at 100,000 miles, coverage ceases as soon as the odometer hits that mark.
Unlike traditional car insurance, MBI doesn’t consider personal details like your driving history. Policy terms are based solely on your vehicle’s age and condition.
Is Mechanical Breakdown Insurance Worth It?
Is MBI a worthwhile investment? If your car is still under a dealer’s warranty, likely not. Review your warranty to confirm it includes everything MBI would cover. If the warranty is active and already paid for (or included in your payments), MBI may be redundant.
However, if your warranty has expired, MBI is a smart choice. It’s typically more affordable than extended warranties and can save you significant costs in the event of a sudden breakdown. Given the financial strain of missed work and lost income due to car issues, the ability to repair your vehicle immediately can provide immense relief.
