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Mechanical Breakdown Insurance Guide

With the average annual cost of maintaining a new car standing at $800 per month – it’s no wonder consumers are on the prowl for insurance that specifically covers auto maintenance and repairs.

Enter mechanical breakdown insurance, i.e., insurance that covers general auto repairs.

No, MBI is not the same as an extended vehicle warranty. For starters, mechanical breakdown insurance is regulated by the state, while extended warranties are a private contract between car owners and vehicle manufacturers, with no direct state government supervision.

Another big difference is that mechanical breakdown insurance can be used at any state-licensed auto repair facility. Not so with extended warranties, which limit vehicle repairs to manufacturer-approved garages and repair shops.

What is Mechanical Breakdown Insurance (MBI)?

Since mechanical breakdown insurance isn’t the same as an extended warranty, what is it? Auto insurance experts offer some guidance on the issue.

“Vehicle mechanical insurance, also known as mechanical breakdown coverage or MBI, is an insurance coverage that covers mechanical failures,” said Aliza Vigderman, director of content at “It’s available for new cars less than 15 months old, leased cars, or cars with less than 15,000 miles on them. Drivers can renew MBI for up to seven years or 10,000 miles, whichever comes first.”

Who offers mechanical breakdown insurance and how much does it cost? More brand-name insurance companies offer MBI policies than one may think.

“Companies that offer mechanical breakdown insurance include 21st Century, AAA, Allstate, American Family (AmFam), Carshield, Endurance, GEICO, Mercury, Olive, Progressive, Toco, and USAA,” Vigderman said. “MBI can cost anywhere from $30 to $200 annually, with an average around $100.”

Many drivers purchase MBI coverage when their vehicle is still new, which can save drivers money over the long haul, insurance industry experts say.

“By buying MBI insurance early, you’ll still be within the miles covered by your manufacturer’s warranty if you drive your automobile for your everyday commute,” said André Disselkamp, chief executive officer at
Finsurancy, a business-to-business insurance industry services provider. “Additionally, you won’t have to pay for unexpected repair bills out of pocket if you have mechanical breakdown insurance.”

A Value-Driven Proposition

Mechanical breakdown insurance is especially worth considering for drivers who want to save money on unexpected repairs that aren’t covered by a manufacturer’s warranty. “Keep in mind that mechanical breakdown insurance doesn’t normally cover basic maintenance or damage caused by normal wear and tear,” Disselkamp noted.

Vehicle owners should know that mechanical breakdown insurance only covers major malfunctions – it’s what shape MBI policies, costs, and longevity.

“Owners need to consider how long you intend to use your car and the likelihood that you’ll experience a major car issue,” said Baruch Silvermann, CEO of The Smart Investor, a financial online academy for millennials.  

Newer cars tend to have fewer breakdown issues compared to older vehicles, so MBI is usually a good idea if you’ll be keeping your vehicle for five years or more. “However, some insurers do have mileage limits, so if you tend to drive more than the average per year, you will need to think carefully if you will still qualify,” Silverman said.

Auto owners who are kicking tires on mechanical breakdown insurance also need to think about a car’s reliability.

“Certain brands of cars have a reputation for greater reliability, which reduces the chances of experiencing a major breakdown issue,” Silberman noted. “Finally, bear in mind that minor repairs aren’t covered. You can expect a deductible of up to $400 with most plans, so if your repairs don’t far exceed this amount, MBI won’t be worth it.”

Tips on Getting Mechanical Breakdown Insurance

Depending on your knowledge and experience with mechanical breakdown insurance, it’s always best to do your homework and tread carefully before signing on the dotted line with an insurance company.

As you conduct your due diligence, take these tips to the MBI table with you.

Know what you’re insuring – and what you’re up against.

Eligible drivers need mechanical breakdown insurance because neither collision nor comprehensive coverage covers mechanical breakdowns, only damage from specific incidents like at-fault car accidents, theft, vandalism, and weather, among other issues.

“In contrast, MBI covers all of a car’s mechanical parts including the transmission, suspension, heating, engine, cooling system, and more,” Vigderman said. “If the mechanical parts break down, the owner will have to pay out of pocket for repairs, which can be costly.

Here’s a repair price rundown, with data from the AAA.

  • Repair – Cost or range

  • Brake repairs – $500

  • Alternator or starter replacement – $400-$600

  • Timing belt replacement – $400-$900

  • Common mechanical repairs – $500-$600

the repairs are unlikely to cost more than $500,” Vigderman said. “With the premium cost, it could be cheaper to pay out of pocket.”

Shop around – but start with your current auto insurer.

As with standard car insurance, it’s a good idea to shop around.

“More and more insurers are offering this type of coverage, so do a little comparison shopping before you agree to any coverage,” Silverman said. “It’s always worth checking if your current insurer offers MBI as you may qualify for multi policy or bundling discounts that could reduce the overall policy cost.”

Cut a deal. It’s helpful to get creative when shopping for a solid MBI policy. “Bundle your car insurance with other types of insurance policies you have, like homeowner’s insurance,” Vigderman said. “Also, ask your current insurance agent for discounts. Chances are you can strike a deal.”

Read the Fine Print
. While comparing MBI quotes is a great idea, make sure that when you
compare, you consider deductibles as well as policy limits,” said Melanie Musson, auto insurance expert with “For example, some policies may have a powertrain maximum limit while others won’t

The Takeaway on MBI

Whether you’re looking for a robust, standalone mechanical breakdown insurance policy for the long haul, or are looking for a blend between MBI, comprehensive auto insurance, and an extended auto coverage warranty, it’s best to start the process early, get educated, and be ready to jump on a good deal when you see it.

“More and more insurers are offering this type of coverage, so do a little comparison shopping before you agree to any coverage,” Silverman said. “That way, you’ll have good MBI coverage when you need it.”

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