What Is Mechanical Breakdown Insurance, and Should I Get It?

For example, a busted engine or puncture in your air conditioner hose will be covered by MBI. But while the coverage seems reasonable in principle, many experts question its value. Car breakdowns can be expensive, but the frequency at which they happen is low. That's why MBI is usually only worth it if you can get cheap coverage. Comparing rates from multiple insurers is one of the best ways to do so..

Find Cheap Auto Insurance Quotes in Your Area

AutoHomeLifeMotorcycleRentersHealthMedicare

Age16-2021-2425-3435-4445-5455-6565+

Currently insured?

YesNo

Find Insurers

It's free, simple and secure.

What is mechanical breakdown insurance?

Mechanical breakdown insurance covers major failures that can occur in your car thatare often excluded in basic auto insurance. So whether it's bad brakes, transmission issues or an electrical system malfunction, MBI covers the repairs. You would simply file an online claim like you would with any car-related issue, and the company should reimburse you for the cost of repairs.

Unlike better-known types of car insurance, MBI is not offered by every company, nor does every car qualify.

Admittedly, there is a lot of overlap between MBI and your car's warranty in terms of coverage. Many of the things that can break down with a new car will be covered by the warranty. MBI plans offer broader coverage than a regular warranty and may cover breakdowns that don't match the specific descriptions laid out in a warranty. MBI plans also last longer than warranties, which are usually only good for three years.

The catch is that you have to buy MBI coverage while the warranty is still in force, in anticipation of its eventual termination. Geico's and Mercury's MBI plans are good for periods of six to seven years, or 100,000 miles, whichever comes first.

How much does mechanical breakdown insurance cost?

Compared to the cost of insuring a car, MBI is usually not too expensive. We found quotes from New York, where it only costs $30 per year for a 2016 Ford Edge with a $250 deductible. A Wall Street Journal investigation found policies could be $75 a year with deductibles up to $400.

Below we list the annual cost of MBI for cars ranging in value from about $24,000 to $64,000. Cars with greater values, like the Tesla Model S ($70,000 and up) and the Audi R8 ($160,000), may not be covered by MBI plans. When we contacted Geico, the company informed us that cars of too high a value may not qualify for MBI.

Mechanical breakdown insurance vs. extended warranty

MBI is very similar to an extended warranty, but they operate in a few different ways.

A Consumers Reports study found that that the average initial cost of an extended warranty was $1,214 for a three-year plan. Based on the prices we found, MBI costs would come out to about $180 to $450 for the six years the policy is in effect.

Other important points of comparison include:

Is mechanical breakdown insurance worth the price?

For MBI to be worth it, you would need to have a breakdown that exceeds the combined price of the plan and the deductible.

If a major breakdown did happen, you could save a lot of money with an MBI. iUltimately, it comes down to the likelihood that your car will have a non-accident breakdown and how much you value the peace of mind of knowing you're covered.

How can you measure your chances of having a major car malfunction? The first thing to consider is how long you are going to use your car. Newer cars tend to break down less often than older ones, so you should only get MBI if you plan to keep your vehicle for more than five years. Remember though, Geico will only insure the vehicle up to 100,000 miles. If you anticipate hitting that number just as your initial warranty ends, then there is no point in purchasing the coverage.

The next thing to consider is the reliability of your car. If the type of car you drive has a record of going many years without breaking down, then there is a smaller chance you will need to use MBI. You can check out the reliability of the make and model of your car on sites like Consumer Reports andTrueDelta.

Lastly, you should remember that MBI will not cover minor — and therefore more likely — repairs. These plans come with $200 to $400 deductibles, so unless the cost of covered repairs far exceeds those amounts, the coverage won’t be worth it.

Methodology

To find the average price of breakdown insurance, we collected sample quotes for three 2016-model cars in New York state: a Ford Edge, a Toyota Camry and a BMW M3. All quotes are from Geico and include a $250 deductible.