The Definitive Guide For Mechanical Breakdown Insurance (2022)

There are so many options for to choose from if you need an extended car warranty, so we’ve ironed out all the details

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When you buy a car off the showroom floor, for the first few years, it is covered by the manufacturer against major repairs and breakdowns under the factory warranty. But once the factory warranty is over, people are often left looking for an alternative form of coverage to protect their car from untimely repairs.

In this article, we will cover the basics of mechanical breakdown insurance and we’ll discuss their feasibility for new as well as used cars. We’ll also compare it to an extended warranty to help you find the best option for your vehicle.

What Is Mechanical Breakdown Insurance?

The Definitive Guide For Mechanical Breakdown Insurance (2022)
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Mechanical breakdown insurance commonly known as MBI is a form of coverage offered by insurance companies as an add-on service on top of your existing auto insurance policy. An MBI coverage means that as an extension of your car’s insurance policy you get coverage for unexpected repair bills caused due to untimely electrical and mechanical failures.

What Does a Mechanical Breakdown Insurance cover

The Definitive Guide For Mechanical Breakdown Insurance (2022)
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An MBI is generally an add on to an existing insurance plan, hence it offers other benefits apart from the standard coverage against breakdowns which usually include:

  • 24/7 roadside assistance: This service can help if your vehicle breaks down or you lock yourself out. It also helps out if you have a flat tire or need gas delivery.
  • Rental car reimbursement: This helps pay for transportation expenses while your vehicle is being repaired under an extended warranty claim.
  • Towing coverage: This takes care of the cost of having your vehicle towed to the nearest repair facility.
  • Trip interruption benefits: This benefit reimburses you for expenses such as lodging if your vehicle breaks down a certain distance from home.

Does My Used Car Qualify For Mechanical Breakdown Insurance?

The Definitive Guide For Mechanical Breakdown Insurance (2022)
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Modern services generally avoid issuing breakdown insurance for used vehicles and this is largely due to the rarity of MBI services. Unlike extended warranties, MBIs are a relatively new concept and as a result, aren’t as popular despite all the convenience they offer.

Geico is the only major insurance provider that offers MBI at this point and their policy excludes used vehicles and caters to first owner vehicles that are less than 15 months old and have less than 15,000 miles on the odometer. MBI is replacing breakdown insurance across the industry with other well-known companies like SAA, Allstate, AAA, Mercury, and 21st Century entering this space. But for those who don’t qualify for an MBI, consider a good extended warranty plan instead.

What Does Mechanical Breakdown Insurance Cost?

The Definitive Guide For Mechanical Breakdown Insurance (2022)
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Similar to an extended warranty, the cost of mechanical breakdown insurance depends on a multitude of factors and a vehicle usually needs to go through a thorough inspection before getting a quote. Here are some of the factors that determine the price of an MBI.

  • Number of high-tech components in the vehicle
  • Age of the vehicle
  • Buying from a dealership versus a third-party provider
  • Vehicle year, make, and model
  • Mileage of the vehicle
  • Level of coverage
  • Driving habits and routine vehicle maintenance

Pros And Cons Of Mechanical Breakdown Insurance

The Definitive Guide For Mechanical Breakdown Insurance (2022)
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MBI is a complex agreement that has its pros and cons, which is why we insist on going through the vehicle agreement to check if it suits your needs. If you are shopping for an MBI, we also insist on comparing it with an extended warranty as it can be more beneficial for a vehicle owner in some cases. Here are some of the pros and cons of Mechanical Breakdown Insurance.

Pros:

  • Easy add-on to the existing auto insurance policy.
  • Cheaper monthly installments in most cases compared to an extended warranty program.
  • Regulated by state insurance commissioners.

Cons:

  • Comparatively higher cost of deductibles.
  • Wear and tear of any kind is not covered.
  • They generally don’t offer routine services like an oil change or tune-ups.
  • Only applicable new and low-mileage vehicles
  • No refund if you cancel your policy

Mechanical Breakdown Insurance Vs An Extended Car Warranty

The Definitive Guide For Mechanical Breakdown Insurance (2022)
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Mechanical breakdown insurance commonly known as MBI is a form of coverage offered by insurance companies as an add-on service on top of your existing auto insurance policy. An MBI coverage means that as an extension of your car’s insurance policy you get coverage for unexpected repair bills caused due to untimely electrical and mechanical failures.

An extended warranty on the other hand is a form of coverage offered by the car’s manufacturer/dealership or a third-party vendor that acts as an extension to your standard warranty that you get when you purchase a vehicle. That means it covers critical vehicle components like powertrain, key electrical components, etc. The extent of parts covered and duration is generally determined by the type and cost of the extended warranty package and can also include perks such as roadside assistance and trip interruption coverage.

Mechanical Breakdown Insurance Extended Car Warranty
Coverage Only one available MBI policy option through Geico Warranty providers offer several options of coverage, from powertrain warranties to bumper-to-bumper warranties
Regulation Regulated by the state insurance commissioner Not regulated by the state insurance commissioner
Payment Plans Can be paid monthly and is renewed often, so financing terms are shorter Can be paid monthly or as a lump sum and are not often renewed, so financing terms may be longer
Cancellation Can be canceled any time but is typically not refunded Can typically be canceled within 30 to 60 days for a full refund or at any time afterward for a prorated refund
Repair Shop Let’s you choose your repair facility Depends on the warranty provider
Coverage Availability Only offered for newer vehicles that haven’t reached 15 months/15,000 miles Coverage available for low- and high-mileage vehicles
Deductible Around $250 $0-$250
Benefits Commonly includes rental car reimbursement and courtesy towing Commonly includes rental car reimbursement, towing, roadside assistance, and trip interruption coverage

Our Recommendations:

The Definitive Guide For Mechanical Breakdown Insurance (2022)
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Uproar:

Uproar is based out of Seattle, Washington, but it’s not like any other extended car warranty company out there. Uproar bills itself as an innovator, which makes a lot of sense considering it’s the first extended warranty company to offer a 100-percent digital, subscription-based experience. The main highlights of uproar include an instant quote and signup online, same-day coverage, no long-term commitments, transparency, and no aggressive salespeople or robocalls. They are BBB accredited and have five-star ratings from both Google and Consumer Affairs.

Olive:

Olive is one of the newest players in the business, apart from extended warranty plans, it also offers mechanical breakdown insurance in California. It has also secured some of the best consumer ratings courtesy of its top-notch service and a wide range of plans that deliver timely resolution of claims.

  • For cars up to 10 years old/ 140k miles
  • 100% online extended warranty solution with customizable plans
  • File claims online 24/7
  • Affordable monthly payments
  • Call for a quote & get a free $5 gift card

Endurance:

They offer Coverage for cars up to 20 years old which makes it ideal for used car owners. They offer hassle-free inspection after which the claim can be filed, making the entire process foolproof and they aim to ensure that you don’t miss minor details which might cause you trouble in the future. They also offer membership benefits which add to the whole customer experience and help them secure the top spot.

  • Coverage for cars up to 20 years old
  • Cut repair costs with full protection for your vehicle
  • Inspection is required before a claim can be filed
  • Extra perks with all-inclusive membership
  • Join & save $300 on a protection plan

CARCHEX

They offer coverage for cars with up to 250,000 miles which makes them a great choice for people who plan to purchase a warranty for their heavily used vehicles. They offer a wide range of policies some of which offer industry-leading claim filing processes. With an A+ rating from the Better Business Bureau, CARCHEX should be on your list when shopping for an extended warranty.

  • Covers cars with up to 250k miles
  • First-rate full-coverage protection for new and used vehicles
  • The claim filing process depends on the policy
  • No-haggle, low-price guarantee
Third-Party Provider Best For Motor1 Rating Coverage Levels Years in Business
1. Endurance Drivers looking for plenty of coverage options and good customer service 4.6 6 15
2. CARCHEX Coverage of used cars with almost any age or mileage 4.4 5 22
Bhavik Sreenath
Bhavik Sreenath
A keen automotive enthusiast with a love for anything with engines. He loves discovering the world of cars and technology to explore new boundaries in the field of modern-day journalism.  Read full bio
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