"Are you protected? Find out how mechanical breakdown insurance can save you thousands!"

 Standard auto insurance policies usually don't cover major mechanical problems, such as transmission or engine problems.

Image : Google.com/images.app.goo.gl/M6yNQoyW9fwVm5fs8

That's where mechanical breakdown insurance (MBI) comes in. This is a type of additional coverage that can help cover repair costs that are not related to normal wear and tear or a car accident.

Understanding mechanical breakdown insurance

Also known as auto repair insurance, MBI covers mechanical failure of some of your vehicle's more expensive components. Usually limited to new and used vehicles. This type of insurance is similar to an extended dealer warranty but is usually much cheaper.

A standard auto insurance policy generally includes several types of coverage that protect you in an accident: collision, liability, and medical payments, as well as comprehensive coverage, which applies in the event of an event beyond your control (weather, theft, etc.).

MBI is more than that. Depending on your policy provider, this may cover problems and malfunctions with the following components:

Transmission

Suspension

Machine

Drive train

Air conditioning

room heater

Be aware that MBI does not cover routine maintenance such as oil changes, tune-ups, or coolant flushes. In fact, your policy will likely require you to maintain your vehicle as specified in your car owner's manual. Otherwise, your claim may be rejected. Check your policy details to confirm what your MBI plan covers.

Check your policy details to confirm what your MBI plan covers.

So, overall, what are the benefits of having an MBI policy?

Cost. Extended warranties are usually paid up front to the dealer. With MBI, you can pay monthly and save a decent amount of money over what you would have paid over the warranty period.

Not interested. Dealers usually roll extended warranties into the car payment, which comes with interest. MBI allows you this type of coverage without the interest attached to it.

Peace of mind. An MBI plan is just another way to check your worries about the potential budget buster your vehicle can cause. If you buy one and have full coverage auto insurance, you're insured for almost anything that can go wrong – whether it's an accident, an act of God, or just a major component that suddenly stops working.

Extended warranty vs. extended warranty mechanical breakdown insurance

New vehicles come with a manufacturer's warranty or manufacturer's warranty. Once it expires, that's when the extended warranty will kick in.

Extended warranties cover vehicle components that are not covered by a regular auto insurance policy, such as the electrical system and other major parts such as the powertrain or engine. This lasts for a certain amount of time and mileage, such as a 7-year, 100,000-mile warranty. Each warranty is a little different, but some also cover issues related to normal wear and tear — which are not part of MBI's coverage.

Mechanical breakdown insurance policies are usually only available for new cars (mileage 15,000 or less). So if you're buying a used car with a little more mileage, a warranty is the way to go, as it can usually be purchased on 5 to 7 year old cars with up to 100,000 miles.

That said, an MBI policy may make sense if you buy a newer car. Not only can it save you money in the long run, but it also gives you a little more freedom in choosing your repair facility. Extended coverage works similarly to health insurance, in that you're covered as long as you stay within a defined network of providers.

Decide whether you need vehicle protection

So when should you think about purchasing MBI protection or an extended warranty? Here are some key factors to consider:

The age and mileage of your vehicle. As mentioned, extended warranties offered by manufacturers usually max out at 100,000 miles, or when your car is 5 to 7 years old, although some companies will offer warranties up to 150,000 miles. Mechanical Breakdown Coverage is designed for newer cars, usually with 15,000 miles or less.

Your financial situation and risk tolerance. If you regularly keep your car on scheduled maintenance, and you have a good emergency fund in savings, then you may be okay taking more of a risk and opting to cover repairs out of pocket. But if thoughts of blown transmissions and damaged brake pads haunt you, MBI or warranty may be the right choice.

Expected repair costs. Replacing a large Mercedes component will obviously be more expensive than replacing a similar part on a Ford sedan, and the coverage costs will also be different. Do the math on how much you will spend on an MBI package or warranty, then compare it to the cost of the repair.

Is mechanical breakdown insurance worth it?

To consider whether an MBI policy is worth it for you, let's look at a specific example:

Auto repair insurance can range from $100 to $500 per year, depending on the provider, with deductibles costing $250 to $500.

Let's say you own a 2022 Honda Accord. The average annual cost in 2023 for repairs on that particular car is $1,667, according to Kelley Blue Book. If you pay on the high end of what an MBI plan costs each year, plus the high range of the deductible, the coverage alone will save you almost $700 per year in that particular case.

Of course, each vehicle comes with different costs, and each policy will offer a variety of different coverages.

Tips for evaluating MBI providers and policies

Compare costs. Many auto insurance companies, including Geico, Allstate, and Progressive, offer MBI coverage. Compare offers and policies and choose the best for you and your vehicle.

Compare coverage. Each policy has different exclusions. Keep in mind that MBI does not cover negligence issues, so if you don't get scheduled maintenance for your car and maintenance problems arise, your insurance company may deny your insurance claim.

Think about different situations. When comparing policies, put yourself in different scenarios. If your car is in the shop for a week, does the MBI policy cover rental cars? What about towing and roadside assistance? Some do but some don't. Know what you are paying for.

Ask questions. Like any insurance, MBI coverage can be complex and complicated. Ask any questions you have for your provider on the front end for added peace of mind.

Location:

Share :