Mechanical Breakdown Insurance: All of The Information You Need To Know
Encountering car troubles is never ideal, especially when you depend on your vehicle for transportation. That’s where mechanical breakdown insurance comes in handy. This type of policy is designed to provide coverage when you’re faced with unexpectedly high auto repair costs. In this article, we’ll delve into what mechanical breakdown insurance entails and how it operates. We’ll also outline the various types of coverage it offers. And for those wondering about the advantages of mechanical breakdown insurance over an extended warranty, we’ll address that as well.
What is Mechanical Breakdown Insurance and How Does it Work?
Mechanical breakdown insurance, or MBI, is basically car repair coverage. You usually buy it before your factory warranty ends, and it lasts longer than that warranty. But remember, it doesn’t cover repairs from accidents.
MBI costs depend on factors like how long you want coverage, your car’s condition, if it’s new or used, and how many miles it has. You can sometimes add MBI to your existing car insurance.
If your car needs a repair, you file a claim with your insurance company. They’ll guide you through the process, which usually involves finding an approved mechanic, diagnosing the issue, and then reimbursing you for the repairs. Just like other insurances, you may need to pay a deductible.
What Does Mechanical Breakdown Insurance Cover
Now that you understand mechanical breakdown insurance, let’s dive into what it usually covers. Most MBI policies include:
- Towing
- Rental car coverage
- 24-hour roadside assistance
- Lock-out service
- Engine
- Drivetrain
- Transmission
- Brakes
- Exhaust
- Power system
MBI can be a lifesaver, especially for major issues like engine or transmission problems, which can cost thousands to repair. Paying a deductible of $250 or $500 instead of the full repair bill is a big relief.
What Isn’t Covered by Mechanical Breakdown Insurance
Similar to other insurance plans, MBI doesn’t cover everything. Here are some typical exclusions you’ll find in most mechanical breakdown insurance policies:
- Routine tune-ups
- Tire problems
- Neglect
- Car accidents
- Alignments
- Spark plugs
- Brake pads
- Corrosion
- Regular wear and tear
- Tire rotations
For specific details about what’s excluded from your policy, it’s best to consult with your insurance agent.
Who Offers Mechanical Breakdown Insurance
If you’re considering adding mechanical breakdown insurance to your vehicle’s protection, here are a few companies worth considering. Keep in mind that availability may vary depending on your location. As with any insurance purchase, it’s wise to shop around and compare prices and coverage options.
- GEICO: GEICO offers mechanical breakdown insurance for vehicles less than 15 months old with fewer than 15,000 miles. This coverage can extend for up to seven years or 100,000 miles.
- Progressive: While Progressive allows you to add MBI to your policy, it’s actually underwritten by a separate company. This setup makes it more akin to an extended warranty than traditional mechanical breakdown insurance.
- Mercury: Mercury’s policies cover both new and used cars and include features like 24-hour roadside assistance, rental car assistance, tire protection, and trip interruption coverage. However, it leans more towards an extended warranty than pure MBI.
When obtaining a quote for MBI, be sure to compare coverage options between companies. Additionally, inquire about specific terms such as up-front fees, labor cost coverage, the claims process, and any processing fees.
Extended Warranty vs. Mechanical Breakdown Insurance
You might be wondering about the differences between mechanical breakdown insurance (MBI) and traditional extended warranties. Here’s a breakdown:
Extended warranties are typically paid upfront and can be offered by third parties or manufacturers. They often come with a deductible under $100 and may limit you to specific repair shops or dealerships. While you can get an extended warranty for a new vehicle, the terms are more rigid compared to MBI.
MBI, on the other hand, usually lasts longer than an extended warranty and offers broader coverage. Payments are spread out over time, and you have more flexibility in choosing where to get your car repaired. Since MBI is a form of insurance, it’s regulated by state laws and may be less expensive in the long run, although the deductible can be higher.
However, MBI may not be available for high-end vehicles, and you might have to pay a separate deductible for each issue, which could add up quickly. Consider these differences carefully when deciding between an extended warranty and MBI.
Extended Coverage: Warranty or Insurance
Deciding whether to opt for mechanical breakdown insurance depends on your vehicle’s future use and your emergency fund savings. ValuePenguin advises that MBI is worthwhile if a breakdown costs more than the plan and deductible combined. Engine or transmission problems can quickly escalate repair costs, making the deductible a money-saving option.
However, some experts argue that MBI might not be necessary for newer vehicles, especially those cheaper to repair. Manufacturer warranties usually cover most issues. Yet, some prefer the added financial security MBI offers, hence its availability.
Extend Your Vehicle’s Coverage
Whether you decide to invest in mechanical breakdown insurance or not, we trust this article has shed light on the alternatives to standard extended warranties. In the realm of automobiles, being well-informed can be immensely beneficial. Understanding how to maintain your vehicle effectively, and knowing where to seek assistance if it malfunctions, could spare you from significant financial strain and provide the reassurance of a manageable deductible.
