car repair insurance
Mechanical Breakdown Insurance (MBI) is a type of coverage that can provide significant financial relief when unexpected vehicle repairs arise. Unlike standard car insurance, which covers damages from accidents, MBI is designed to cover the cost of fixing mechanical failures not caused by an accident, such as a malfunctioning engine or a punctured air conditioner hose.
This coverage can be a valuable addition to your standard car insurance policy, potentially saving you from hefty out-of-pocket expenses when your vehicle experiences a major system malfunction. However, the coverage specifics, costs, and the claims process can vary between insurance providers. In this article, we will delve into the details of MBI, discussing its benefits, costs, coverage details, and more to help you decide whether this type of insurance is right for you.
Understanding Mechanical Breakdown Insurance
Mechanical Breakdown Insurance (MBI) is a specialized form of protection that helps cover the cost of repairs for mechanical failures in a vehicle not due to an accident or normal wear and tear. It functions similarly to an extended warranty but is offered through insurance companies as either a standalone policy or an endorsement of an existing auto insurance policy.
MBI typically covers major vehicle components and systems such as the engine, transmission, drive axle, steering, and electrical components. It may also extend to other parts like the brake systems, suspension, air conditioning, and some digital components, depending on the level of coverage chosen.
The insurance is available for new or leased cars under a certain age or mileage—often less than 15 months old and with less than 15,000 miles. Coverage can usually be renewed up to a certain point, such as seven years or 100,000 miles, whichever comes first. After paying a deductible, MBI covers the cost of repairs to all car mechanical parts, excluding maintenance and wear and tear.
MBI is particularly beneficial as it can provide financial security against the high costs of repairing complex vehicle systems, which can run into thousands of dollars. For example, replacing a car’s engine can be a significant expense, but with MBI, this cost may be covered under the policy.
It’s important to note that MBI is not the same as car insurance, which covers vehicle damage and bodily harm caused by collisions, nor is it the same as a manufacturer’s warranty, which comes with the purchase of a new car and covers defects in materials or workmanship for a certain period.
MBI is typically offered as an optional coverage and is not available from all insurance providers. Companies like GEICO and Progressive are known to offer MBI, and vehicle owners should compare coverage options and costs from multiple insurers.
Mechanical Breakdown Insurance (MBI) is designed to provide coverage for repairing or replacing a vehicle’s major components unrelated to an accident, misuse, or normal wear and tear. The specific parts and systems that MBI typically covers include:
– **Engine**: The vehicle’s core, which includes all the internal components necessary for the car’s operation.
– **Transmission**: The system transmits power from the engine to the drive axle, allowing the vehicle to move at different speeds.
– **Drive Axles**: The drivetrain part transfers power from the transmission to the wheels.
– **Brakes**: The vehicle can slow down or stop, including brake pads and rotors.
– **Steering Components**: The parts that enable the driver to control the vehicle’s direction, such as the steering wheel and linkage.
– **Air Conditioning**: The system that cools the vehicle’s interior, including the compressor and evaporator.
– **Fuel System**: The components that store and deliver fuel to the engine, such as the fuel pump and fuel injectors.
– **Engine Cooling System**: The system that maintains the engine at the proper operating temperature, including the radiator and water pump.
MBI policies may also cover additional parts such as the electrical system, suspension, emissions, exhaust systems, and certain electronic components. However, MBI does not cover routine maintenance (like oil changes and tune-ups), wear and tear items (such as brake pads and tires), or damage resulting from an accident.
It’s important to note that coverage can vary between insurance providers and plans. Some policies offer more comprehensive, bumper-to-bumper coverage, while others cover only specific systems and components. Therefore, policyholders must read their MBI policy carefully to understand the specifics of what is included in their coverage.
Cost of Mechanical Breakdown Insurance
Mechanical Breakdown Insurance (MBI) typically costs between $30 and $100 per year on average. The cost of MBI can be influenced by various factors, such as the make and model of the vehicle, its age and mileage, and the driver’s history.
The cost of MBI is generally less expensive than extended warranties or vehicle service contracts. For instance, on average, extended auto warranties typically cost between $400 and $900 per year. Consumer Reports revealed that the average extended warranty costs $1,200 per year.
MBI policies usually have deductibles ranging from $200 to $500 per incident. This means the policyholder is responsible for paying this out-of-pocket amount before the insurance coverage kicks in for a covered repair.
Comparison of MBI with Extended Warranties and Other Types of Vehicle Protection
Mechanical Breakdown Insurance (MBI) and extended warranties cover unexpected mechanical failures, but they differ in several ways.
Cost and Payment Flexibility
MBI is generally more affordable than extended warranties. While MBI typically costs between $30 and $100 per year, extended warranties can average costs between $400 and $900 annually. MBI also offers more payment flexibility, allowing policyholders to pay monthly, whereas extended warranties often require upfront payment.
MBI and extended warranties cover major vehicle components such as the engine, transmission, drive axle, steering, emissions, exhaust, suspension, and air conditioning and heating systems. However, MBI typically does not cover routine maintenance services like oil changes, tune-ups, or the replacement of brake pads, filters, tires, or spark plugs.
MBI policies usually have higher deductibles than extended warranties, meaning policyholders may have more out-of-pocket costs if their vehicle breaks down frequently.
Purchase and Provider
MBI is typically purchased through an auto insurance provider, while extended warranties are usually sold by dealerships, manufacturers, and third-party companies.
Extended warranties often come with additional benefits like emergency roadside assistance, which may not be included with MBI.
Duration of Coverage
MBI plans typically last longer than warranties, often covering six to seven years. In contrast, extended warranties usually run from two to seven years.
MBI policies can usually be canceled anytime, offering the policyholder more flexibility. In contrast, canceling an extended warranty may not always result in a refund, especially if the entire cost was paid upfront.
It’s important to note that the specifics of coverage, cost, and terms can vary significantly between different providers and plans. Therefore, it’s crucial for consumers to carefully compare the details of different options before making a decision.
Exclusions in Mechanical Breakdown Insurance
Mechanical Breakdown Insurance (MBI) covers unexpected mechanical failures in a vehicle. However, several types of damages and situations are typically not covered by MBI.
Damage from Collisions
MBI does not cover damage resulting from collisions. This type of damage is usually covered under a separate collision coverage policy.
Wear and Tear
MBI does not cover normal wear and tear on a vehicle. This includes the gradual deterioration of vehicle parts due to regular use over time. For example, a suspension that becomes less effective over time due to wear and tear would not be covered under an MBI policy.
Routine Maintenance and Poor Maintenance
Routine maintenance services, such as oil changes, tune-ups, or the replacement of belts, hoses, and filters, are not covered by MBI. Additionally, MBI does not cover damage caused by poor maintenance or misuse of the vehicle.
Certain Mechanical or Electrical Breakdowns
MBI does not cover all types of mechanical or electrical breakdowns. For instance, if a loss or damage to the vehicle results from or is caused by a mechanical or electrical breakdown, the loss is excluded from coverage.
MBI typically does not cover non-mechanical items like vehicle trim.
Damage from External Events
MBI does not cover damage from external events such as natural disasters, hail, flooding, sinkholes, car theft, and vandalism. These types of damages are usually covered under comprehensive coverage.
MBI does not cover loss or damage that occurred to the vehicle before the policy was purchased
Claims Process for Mechanical Breakdown Insurance
Filing a claim for Mechanical Breakdown Insurance (MBI) involves a series of steps to ensure that the repair process is smooth and that the policyholder is adequately covered for the mechanical breakdown. Here’s what to expect during the MBI claims process:
**Report the Breakdown**: As soon as you experience a mechanical breakdown, you should report the incident to your insurance provider. For instance, with GEICO, you can report your MBI claim by calling (800) 443-7411 during specified business hours.
**Do Not Authorize Repairs**: It’s crucial not to authorize any repairs before obtaining authorization from your insurance provider. Doing so without prior authorization may jeopardize your claim.
**Claim Examiner Contact**: After reporting the breakdown, a claim examiner from the insurance company will contact you, typically within 24 hours, to explain the MBI claim process. This examiner will guide you through the repair process and keep you informed.
**Choose a Repair Facility**: You can take your vehicle to the repair facility of your choice. Inform the facility that you have MBI coverage and provide them with your policy number. The repair facility will need to contact your insurance provider with a diagnosis and repair estimate.
**Insurance Company Authorization**: The insurance provider will review the repair estimate and must authorize the repairs before any work can begin. This step is essential to ensure that the repairs are covered under your MBI policy.
**Repair and Claim Settlement**: They can proceed once the repairs are authorized. After the repairs are completed, the insurance company will settle the claim according to the terms of your MBI policy, considering any applicable deductibles.
**Follow Up**: Throughout the repair process, your claim examiner will follow up with you to ensure everything is proceeding smoothly and address any concerns you may have.
It’s essential to have as much information as possible about the breakdown when reporting the claim and to follow the instructions provided by your insurance company to avoid any delays or issues. Always refer to your specific policy for detailed instructions, as processes may vary slightly between insurance providers.
Insurance Companies Offering Mechanical Breakdown Insurance
Several insurance companies offer Mechanical Breakdown Insurance (MBI) as part of their product offerings. Here are some of the companies that provide MBI:
GEICO offers Mechanical Breakdown Insurance (MBI) for new or leased cars less than 15 months old with less than 15,000 miles. The MBI, which can be renewed for up to seven years or 100,000 miles, covers charges for parts and labor after a $250 deductible. To claim, report the breakdown to GEICO and wait for authorization before starting repairs. You can choose your repair center, but GEICO needs a repair estimate before authorizing repairs. The cost of GEICO’s MBI varies but typically ranges between $100 and $150 per year.
Progressive offers Mechanical Breakdown Insurance (MBI) through Good Sam’s mechanical repair plan. This plan covers sudden and unexpected breakdowns for cars, trucks, and RVs. The coverage is available for personal vehicles and trailers up to 15 model years and less than 100,000 miles. Rear-engine diesel motorhomes can be covered up to 120,000 miles. The flexible plan allows customers to choose their repair location and deductibles. The maximum length of coverage is up to 216 months or 150,000 miles. Deductibles range from $100 to $500. To be eligible for this plan, one must be a Good Sam member and a Progressive insurance customer.
Mercury Insurance provides MBI coverage that protects your vehicle when it breaks down. This coverage is available for new or used cars that are less than 7 years old, have less than 100,000 miles, and are under their original manufacturer’s warranty coverage. The MBI covers repairs if your vehicle has major mechanical failures, breaks down, or needs replacement parts. However, it does not cover routine maintenance, wear and tear, or damage caused by an accident. Other exclusions include damage to tires, brake pads, filters, spark plugs, and fluids. The cost of Mercury’s MBI varies depending on the car, but it costs around $100 a year on average.
AAA offers Mechanical Breakdown Insurance (MBI) as an add-on to their standard policies. This coverage is designed for vehicles less than 15 months old with less than 15,000 miles on them. The MBI covers repairs to major vehicle systems, such as the engine and transmission, not typically covered by standard car insurance policies. However, it does not cover routine maintenance, wear and tear, or damage caused by an accident. AAA’s MBI varies depending on the vehicle, but on average, it costs around $100 per year. Customers must also pay a deductible before the MBI coverage kicks in.
American Family offers Mechanical Breakdown Insurance that covers repairs to a vehicle’s major systems, including the engine and transmission. This coverage is necessary for repairs usually excluded from standard car insurance policies. However, it does not cover routine maintenance, wear and tear, or damage caused by an accident. Other exclusions include damage to tires and brake pads. The specifics of what is covered and what is not can be found in the policy details.
Allstate offers a Vehicle Service Contract similar to Mechanical Breakdown Insurance. It covers repairs to major vehicle systems, like the engine and transmission, once the factory warranty has expired. The contract also covers towing, emergency road services, rental car reimbursement, and trip interruption coverage. However, it does not cover routine maintenance, filters, fluids, tires, brake pads and shoes, and spark plugs. Damage caused intentionally or by improper maintenance is also not covered. A deductible is required when filing a claim before the plan pays for the rest, up to the policy limits.
In partnership with Mercury Insurance, AIS offers Mechanical Breakdown Insurance in California. This coverage provides additional protection for Californians who rely on their vehicles daily. Depending on the level of coverage chosen, MBI can extend the coverage period of the existing warranty. The specifics of the coverage can be found in the policy details.