What Is Mechanical Breakdown Insurance and Do You Need It?

Updated February 7, 2023

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When you’re in an accident, car insurance can help pay for repairs to your vehicle and cover costs related to property damage, bodily injury, and liability. Standard car insurance won’t pay for repairs to your car if they aren’t related to an accident. While a warranty from your vehicle’s manufacturer may cover some defects, it won’t cover all of them. Mechanical breakdown insurance, also called car repair insurance, can help cover repairs to your vehicle that you would otherwise pay for out of pocket.[1]

What is mechanical breakdown insurance (MBI)?

Mechanical breakdown insurance (MBI) is an insurance coverage you can get as a stand-alone policy or added on to your existing car insurance policy. MBI typically doesn’t cover standard wear and tear or routine maintenance, but it will cover mechanical failure.

While new cars may come with manufacturer warranties that cover mechanical defects, these warranties don’t last forever, and they typically don’t cover everything that can go wrong in a car. MBI is intended to cover issues that warranties won’t.

What is a mechanical breakdown?

A mechanical breakdown is a failure in a vehicle’s systems unrelated to an accident. For example, if you have an issue with your car and an auto shop tells you that your transmission is failing, mechanical breakdown insurance could cover replacing your transmission.

If you’re in a car accident and your transmission is destroyed in the accident, standard car insurance, not MBI, would cover the repairs after you pay a deductible.

What to Do If You Can’t Pay Your Car Insurance Deductible

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How mechanical breakdown insurance works

Mechanical breakdown insurance is a policy you can purchase separately from your auto insurance coverage or add to your existing policy, depending on your insurance company.

Getting mechanical breakdown insurance and standard car insurance from the same company can make things like paying bills easier and could qualify you for a bundling discount.

With an MBI policy in place, if you experience a car mechanical breakdown, you can file a claim to ask the insurance company to cover the vehicle’s repair costs. Some insurance companies have a claims process that you have to start before you take your car in for repairs.

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What mechanical breakdown insurance covers

Mechanical breakdown insurance can cover:

  • Electrical systems

  • Air conditioning

  • Engine

  • Starters

  • Steering

  • Brakes

  • Transmission

  • Exhaust

  • Suspension

These car systems and parts can be costly to fix, and it may be difficult to pay for these repairs out of pocket.

If you have a mechanical breakdown insurance policy and your car breaks down on the side of the road, here’s how coverage can work:

  • First, check with both your standard car insurance and your mechanical breakdown coverage to see if towing is covered. Then, follow the steps outlined in your policy to start the claims process.

  • Once your car is at a repair shop, the shop will diagnose the issue and submit a repair cost estimate to your insurance company. You’ll be responsible for paying the deductible for your coverage, and your insurance company will cover the rest of the bill as long as the needed repairs are covered and approved.

  • Your insurance company may ask you to get a quote from a competing repair shop or may deny part of the needed repairs, in which case you’re responsible for paying those and your deductible.

Why Do Car Insurance Companies Deny Claims?

Why Do Car Insurance Companies Deny Claims?

What MBI excludes from coverage

Mechanical breakdown insurance typically isn’t available for older or high-mileage vehicles. For vehicles that are able to get a policy, mechanical breakdown insurance won’t cover normal wear and tear or maintenance issues.

For example, MBI doesn’t typically cover routine maintenance like tire rotation, tire replacement, brake pad replacement, oil changes, and transmission fluid changes.

Mechanical breakdown insurance usually doesn’t cover issues arising from neglect or improper maintenance — like driving thousands of miles past a due oil change.

How much does mechanical breakdown insurance cost?

Mechanical breakdown insurance costs vary depending on several factors. Where you live, the age of your vehicle, the type of your vehicle, the complexity of its components, the length of coverage, and the deductible you choose all have an effect on your insurance rate.

You’ll qualify for the cheapest rate with a new vehicle with low mileage, a high deductible, a short coverage period, and simple components, like a manual transmission. You’ll also qualify for the cheapest rate if you live in an area with a lower cost of living with lower-cost auto repair shops.

For example, mechanical breakdown insurance for a 2018 GMC Sierra with a diesel engine, tow hitch, four-wheel drive, 50,000 miles, and a $100 deductible in Chicago would be $177 per month with no option to go beyond a one-year term. This higher rate is due to the location, low deductible, high mileage, age, and mechanical complexity of the vehicle.

Mechanical breakdown insurance for a 2023 Honda Civic with a gas engine, no towing ability, front-wheel drive, 500 miles, and a $500 deductible in Jackson, Mississippi, would be $10 per month with a four-year coverage term. Both quotes were obtained from Good Sam, a membership organization for RV owners that provides members with services like discounts, roadside assistance, RV and auto insurance, travel assistance programs, and more.

Mechanical breakdown insurance vs. extended warranty

Mechanical breakdown insurance is similar to an extended warranty with a few key differences. You can purchase MBI policies through insurance companies that offer them at any time, and you can generally cancel them at any time. MBI policies typically have monthly premiums.

You’ll typically purchase an extended warranty through dealerships or third parties, and they can’t be canceled. They’re either paid for up front or financed into your monthly payment.

Both MBI and extended warranties typically cover mechanical issues and exclude coverage for routine maintenance or damage from car accidents. MBI policies are regulated by state insurance regulations, whereas extended warranties aren’t.

MBI policies can cost as little as $10 per month and are typically only available for newer vehicles with low mileage. Companies sell extended warranties for almost any car, and these can vary in cost from $2,000 to $5,000, depending on the car’s condition and age.[2]

MBI vs. roadside assistance

Mechanical breakdown insurance covers repairs to your car in the event of a mechanical breakdown. Some MBI policies also include roadside assistance, but not all.

Roadside assistance policies typically provide coverage for minor roadside help, like a jump start or flat tire, and may cover towing to an auto shop. But they won’t cover the cost of repairing your vehicle.

Who sells mechanical breakdown insurance?

Several large car insurance companies offer mechanical breakdown insurance. Going with one of these companies can give the peace of mind of knowing you have a big brand backing you if something goes wrong. Here are some insurance companies that offer MBI:

If smaller companies with a more personal feel are your preference, several mechanical breakdown insurance companies exist that will offer you stand-alone MBI policies.

Is mechanical breakdown insurance worth it?

If you buy a newer car and are worried about paying for potential repairs, you should strongly consider getting mechanical breakdown insurance. A better alternative to getting breakdown insurance is making sure that your car-purchasing budget allows you to have a robust emergency fund so that you can cover repairs yourself over the lifetime of your vehicle.

Here are some pros and cons of mechanical breakdown insurance to consider:

  • Covers potentially expensive repairs

  • Adds peace of mind

  • Cheaper monthly cost for newer, low-mileage vehicles

  • Warranties may cover issues already

  • Monthly costs can add up over time

  • Not typically available on older or high-mileage vehicles

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The 10 Best Car Insurance Companies

Mechanical breakdown insurance FAQs

Here are answers to some commonly asked questions about mechanical breakdown insurance.

  • Is there a deductible for MBI?

    Yes, MBI can have a deductible depending on your policy. You’ll typically choose a deductible between $100 and $500. While $0 deductible plans are available, you’ll typically pay more in premiums for them.

  • How do you submit a mechanical breakdown insurance claim?

    How you submit a mechanical breakdown insurance claim will depend on your policy. You’ll most likely have to call a number or submit a form through an app or your insurance company’s website.

  • Does MBI limit where you can go for repairs?

    Most MBI policies don’t limit where you can go for repairs, but it depends on your specific policy. Some policies may have preferred repair networks. If a recall or car manufacturer’s warranty covers the repairs, you may have to take your car to a dealership instead of an independent shop.

  • Does MBI cover parts and labor?

    For covered issues, MBI pays for the cost of parts and labor to repair your vehicle. Non-covered issues, like routine maintenance or problems due to neglect or improper maintenance, won’t have parts or labor covered.

  • Is mechanical breakdown insurance good for used cars?

    Mechanical breakdown insurance can be good for used cars, but it can be difficult to find policies for older used cars. More mechanical breakdown insurance policies are available only on newer cars with low mileage. If you find a policy for your used car, MBI is typically significantly cheaper than an extended warranty if you’re worried about affording repair costs.

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Data scientists at Insurify analyzed more than 40 million real-time auto insurance rates from our partner providers across the United States to compile the car insurance quotes, statistics, and data visualizations displayed on this page. The car insurance data includes coverage analysis and details on drivers' vehicles, driving records, and demographic information. Quotes for Allstate, Farmers, GEICO, State Farm, and USAA are estimates based on Quadrant Information Service's database of auto insurance rates. With these insights, Insurify is able to offer drivers insight into how companies price their car insurance premiums.


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Rae Hartley Beck
Rae Hartley Beck

Rae got her start writing in finance with a column for her college newspaper on living, traveling, and budgeting with limited means in 2012. Her work has since appeared in Investopedia, Bankrate, and other financial news outlets. She was an early member of the Financial Independence, Retire Early (FIRE) movement and went from having her family home foreclosed on in high school to becoming a homeowner herself at age 24.
Rae was an award-winning claims specialist for the Social Security Administration for almost six years before leaving to share her knowledge with the public as a full-time writer and editor. Her insider knowledge and experience explaining and applying policies to thousands of beneficiaries gives her unique insight into retirement and disability topics.

When not writing Rae can be found backpacking in the desert with her retired racing sled dog, reading an average of 200 books annually, and helping teens and women gain control of their financial lives through organizations like Women's Personal Finance and Girl Scouts of America.

Expertise: Real estate, mortgages, auto lending, homeowner's insurance, auto insurance

Education: BA, History and Education Studies, Berea College

Rae Hartley Beck's Top Finance Tip: "Five years of diligence and budgeting at the beginning of your career can save you 20 years at the end of it."