Is Mechanical Breakdown Insurance Worth It?


Car trouble is so often the worst kind of trouble.

Few things can rip a hole in your budget so rapidly and so thoroughly. A new transmission (~$2,500) or rack and pinion (~$1,000) can wipe out a rainy day fund in one cruel clank or clunk. And it's these types of unexpected problems that make mechanical breakdown insurance so tantalizing. (See also: 4 Tips to Save on Car Insurance)

The question, as with most forms of insurance — is the gamble worth it?

What Is Mechanical Breakdown Insurance?

Mechanical breakdown insurance (MBI) can insulate consumers against big-ticket car repair costs. This is not an extended warranty or anything of the sort. Instead, this is a typically inexpensive form of insurance that is subject to the same regulatory controls as other insurance products.

These policies don't cover defects or issues that arise from standard maintenance issues, but they can be a financial lifeline if catastrophe strikes. Consumers tend to pay reasonable premiums (anywhere from $75 and up) and have deductibles ranging from $50 to $500 or more, depending on the details of the plan and the age of the automobile. Insurers favor consumers with newer vehicles or leased models. Those with older cars might be unable to procure MBI.

Some plans also cover things like towing, car rental, and trip interruption. Terms can range from a year to more than a half dozen, or span tens of thousands of miles. Some policies are even transferable, which car owners can use as a selling point when the time comes to unload their vehicles.

“We all have cars, and we all know they end up breaking down,” said Hank Coleman, managing editor at “Insurance is always a hedge against future problems, and MBI can be a really savvy investment depending on your car and your coverage options. There's few policies that can match the universal need that MBI is setup to cover.”

How Does It Work?

While MBI has some built-in safeguards as a legitimate insurance product, consumers should still take great pains to ensure they're getting a policy that meets their unique needs and covers theirs concerns.

Consumers should be able to take their ailing auto to a repair shop of their choice. Avoid policies that try to limit, qualify, or otherwise restrict decisions related to who completes repair work. There should also be clear language explaining that your deductible payments are for visits to the repair shop and not required for every single repair.

Remember, too, that this is breakdown insurance. Car equipment that becomes defective because of normal wear and tear over time isn’t covered. Unless you have a warranty or extended service agreement, things like brake pads, shocks, and other parts will require out-of-pocket outlays.

And what about warranties? Newer automobiles may come with a manufacturer warranty or service agreement that all but eliminates the need for MBI. It’s important to evaluate a potential policy in light of existing warranties and their expirations.

Why Get Mechanical Breakdown Insurance?

For some consumers, it might make more sense to simply tuck away a few extra dollars each month in an auto emergency fund. Those who like having an added layer of protection can shop around for MBI. As an added bonus, those who purchase it when their car is new tend to enjoy lower rates as the years go on.

In the end, though, it’s typically one of those peace-of-mind purchases.

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Meg Favreau's picture

I'd be really interested to hear if any readers have purchased MBI, and whether or not you felt like it was worth it.

Guest's picture

I had an Mechanical Breakdown Insurance through Carchex on my son's 2006 Nissan Maxima. Carchex calls its an extended warranty on their website. I've had the warranty about 5 months. The total cost is about $1,600 and I pay a company named MEPCO, a monthly payment of around $88 for 18 months. The MBI is good for 100,000 miles or 5 years from the time I bought the policy. It is transferrable.

Three weeks ago, the transmission in my son's vehicle went out. The vehicle had 78,000 miles on it. I was not happy about this. I googled this and found out Nissan is having issues with 2004-06 Maxima transmissions. I took the vehicle to my favorite repair shop in Plano, TX....Tidwell's automotive. They work with MIB claims frequently. They did the paperwork. Now it took longer than I felt necessary to get the claim approved. However, there was a caveat on the part of the MIB company. The person responsible for working the claim had a death in the family and the claim was turned over to someone else for review and processing. The insurance company sent someone out to look at the transmission after it was removed from the vehicle. Due to the cost ($4,300), the claim had to be approved by management. However, the claim was approved and the vehicle repaired. The vehicle had the transmission overhauled and the control module assembly replaced. My deductible was $100. Beats the heck out of that $4,300.

My recommendation is:
1. Find a garage that accepts and handles MIB claims.
2. Make sure the MIB company has back up insurance to pay your claim.
3. Call the company and see how long it takes to answer your call.
4. Read the fine print in the contract. Especially the part about maintaining the vehicle and keeping records.

I have been pleased. It worked out well for me. Good luck.

Guest's picture

As with any insurance, it's worthless if the company can't or won't pay off. I've also heard that some are just total scams. How about some names, good or bad?

Guest's picture
Frankie's Girl

We have this on my husband's car through GEICO insurance. We were offered it when we first bought the vehicle. It is around $100 a year for coverage. It covers ANYTHING that goes wrong with the car up to 100,000 miles (I think it might also be up to 10 years, but I can't remember and will have to check if we get near either of those contingencies). We will absolutely cancel it if we reach the end of coverage, but I liked the peace of mind knowing we'd not get hit with a huge bill so to us, it has been worth it. Worth it more if we'd actually had something go wrong with it, but 6 years and going strong with no mechanical problems at all.

I guess banking that $100 a year would have been nice since it's looking like we're not going to have to use it before the policy runs its course. Still feel pretty good about having it, however.

It is a $500 deductible and after that, they pay for everything else. NO limits on who we can take it to or anything.

Guest's picture

I just had to use my MBI from Autoland for a power steeritn pump. The total bill was $260 and I had a $100 deductible. Of the balance of $160 they only paid $107 because they wanted the auto shop to use MBI's part supplier. In my opinion, it's not right to tell the auto shop to use a specific place or we're not going to pay for anything over the cost of our part supplier. As it is, the part was $160 but if I had taken my car to the dealership just the pump was $264 so I can just imagine my out of pocket exspenses would have been far greater than the extra $53 I had to dish out. So is it worth it? Not in my opinion. Just like any other insurance, they're going to do any thing they can to avoid paying their portion of the claim. Will I ever buy another MBI? HELL NO!!! Especially from Autoland!

Guest's picture

Hmmm as with all insurance, it seems like a prudent idea but at the end of the day it's all set up to bring in more and more money for the insurance companies. You are able to insure anything these days so where do you draw the line for that 'peace of mind' before you are completely out of pocket because of all the insurance premiums your are's a hard one to balance I think.

Guest's picture

In a lot of cases this falls under the domain of warranties more than it does actual insurance products, though there's a bit of crossover in the case of MBI that you referenced above.

Guest's picture

There are many different tips available with regard to saving money on your car insurance. Before you sign up with an insurance company, you should make sure they offer any discounts you are interested in so you can be sure to get the best deal possible on your car insurance. Other tips like this are written in this article. If you are interested in saving money on your car insurance, then please read on.

Guest's picture
John Baxter

Here are 4 reasons I see to get MBI insurance:

1. It is advisable for those people who are going through difficult financial times and they still need coverage.

2. It could help the people who use their cars with current repair issues. They most probably have not fixed them due to the expenses being a struggle.

3. It is helpful for drivers who commute for long periods in rough journeys.

4. It is better than a warranty for it you do not lose coverage once you get out of your business. This protection is covered by the guarantee of the state insurance.

Poliseek really has some competitive quotes.

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