Does Car Insurance Cover Mechanical Breakdowns?

MBI is a type of auto insurance coverage that applies to your car’s mechanical parts, including the following:

• Air conditioning
• Control arms
• Cooling system
• Drive train
• Engine
• Heating
• Suspension
• Transmission

In other words, if you have a mechanical breakdown, MBI will cover the cost of your mechanical failure repairs. However, not everyone can purchase MBI. It’s only available for cars that meet the following conditions:

• Less than 15 months old
• Leased
• Have been driven less than 15,000 miles

You can renew it for up to seven years or 100,000 miles, whichever comes first.

Car insurance only covers mechanical breakdowns if you have MBI. Collision coverage, comprehensive coverage, and property damage liability coverage do not cover mechanical breakdowns. Instead, they cover damage from collisions and events like natural disasters, hail, flooding, sinkholes, car theft, and vandalism. Learn more about the differences between comprehensive and collision coverage.

What MBI Covers

• All mechanical parts of a car
• Air conditioner
• Control arms
• Cooling system
• Drive train
• Engine
• Heating
• Suspension
• Transmission

What MBI Doesn’t Cover

• Routine maintenance: Oil changes, transmission fluid replacement, and coolant flushes aren’t covered.
• Wear and tear: MBI doesn’t apply to tires, drive belts, or brake pads.
• Areas of the car aside from the mechanical parts: MBI applies to the car’s mechanical parts exclusively.
• Injuries: To be reimbursed for injuries, you’d need either bodily injury coverage or medical payments coverage, depending on whether you live in a liability or a no-fault state.
• Collision-caused damages: Any damages due to a collision are covered under property damage or collision coverage, depending on whether or not the accident was your fault. If the accident was your fault, collision coverage would apply, while property damage coverage would apply if it wasn’t your fault.

How It Works

If your new car has a mechanical breakdown and you have MBI, you would first file a claim, then pay your deductible. For MBI, deductibles are usually $100 to $500.¹ After you meet your deductible, your insurance would cover your repair costs up to your coverage limit. For bills beyond your limit, you’ll be responsible out of pocket.

The cost of auto insurance depends on many factors. The cost of MBI specifically depends on the following aspects of your vehicle.

• Make and year: Certain cars are more likely to be stolen. For example, the most stolen car in 2020 was the Ford full-size pickup, with over 44,000 thefts overall. Other commonly stolen cars include the Chevrolet full-size pickup, the Honda Civic, and the Honda Accord.² Also, older cars are more likely to be stolen than newer cars. In 2020, the average year of the 10 most-stolen cars was 2007, making them 13 years old. Commonly stolen cars have higher insurance rates than cars that are not often stolen.
• Model: Different car models have different safety ratings from the Insurance Institute for Highway Safety. Insurance rates are lower for safer cars.
• Mileage: Many people think that cars with high mileage cost more to insure, but mileage does not affect car insurance rates, according to Progressive.
• Selling price: More expensive cars are more expensive to insure because of their higher repair rates.³⁴

Buying MBI is worth it to cover the high repair costs of a car’s mechanical parts, as shown below.

If you can spend less annually than what you might pay for repairs, MBI is worth it.

Questions to Ask Before Buying

Not all MBI is created equal. Before you buy, ask your insurance agent these questions:

• What is excluded from the coverage?
• How much is the deductible?
• How do I file a claim?
• Are there any upfront costs?
• How much does the insurance raise my premium?
• What repair shops can I go to?
• How long will this coverage last?

Companies That Offer MBI

These are some car insurance companies that offer MBI:

• 21st Century
• AAA
• Allstate
• AmFam
• CarShield
• Endurance
• GEICO
• Mercury
• Olive
• Progressive
• Toco
• USAA

The alternative to MBI is an extended warranty. When you buy your new car, your car salesperson may offer you an extended warranty. Read more to find out if you should take that offer.

Which One Should I Get?

We recommend getting MBI rather than an extended warranty, but you can compare the pros and cons of each below.

Although extended warranties have smaller deductibles than MBIs, they are more expensive overall, cover fewer mechanical parts, and, unlike car insurance, aren’t regulated. However, if your car isn’t eligible for MBI, an extended warranty can be a useful alternative.

For new, leased, and low-mileage cars, mechanical breakdown coverage will give you the peace of mind you need. No one likes being denied coverage, so your best bet is to get as much insurance as you can afford.