Understanding Mechanical Breakdown Insurance – Is It Necessary to Purchase?


When looking at your latest automobile insurance statement, you may find something new: Mechanical Breakdown Insurance. If you’re like me, your first thoughts were “what is this and is it necessary?”  

What is Mechanical Breakdown Insurance (MBI)?

MBI typically covers new or leased cars with few miles. For example, most insurers require that the vehicle must be less than 15 months old or have less than 15,000 miles, but the policy can be renewed until the car is 7 years old or has 100,000 miles. Typically, the first owner of the vehicle is the only one that can purchase the insurance.

The coverage includes mechanical failure or collapse that includes all parts and systems of the vehicle, and generally allows for repair wherever the owner chooses.  This is coverage that is in addition to your manufacturer’s warranty. 

MBI does not include typical wear and tear on your car or coverage for an accident and liability.

Is Mechanical Breakdown Insurance for you?

For some, MBI could be an important piece to their automobile insurance policy because it offers coverage longer and for more miles than their manufacturer’s warranty (if you sign up before the month and mileage limit). Also, if you would be at financial risk if a mechanical breakdown were to occur, this insurance could be something to consider. You cannot put a price on being able to sleep at night, knowing that if something were to happen, you would be covered. One option is to use this as an extended warranty, knowing that it could have added benefits with a lower cost, as well as generally being able to cancel at any time.

Most new cars already come with warranties, so MBI can be seen as duplicated coverage, and simply unnecessary. For these, having this added into their policy would not be as important. If MBI isn’t for you, one option is to set aside these premium dollars in an account to use if a problem arises, and if one doesn’t, this money can be used on anything else for your vehicle.

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