Mechanical Breakdown Insurance – Everything You Need to Know
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It is often problematic when our cars break down. Seeing as you rely on your car for transportation, why not buy an insurance that will ensure it functions smoothly? Mechanical breakdown insurance (MBI) has got you covered. It stops you from spending huge sums of money in getting your car repaired or serviced.
This post will explain what mechanical breakdown insurance is, how it works and the kind of coverage expected. In addition to this, we shall discuss why people may choose MBI instead of extended warranties.
What Is Mechanical Breakdown Insurance and How Does It Work?
In essence, mechanical breakdown insurance is “vehicle repair insurance.” Usually, MBI should be purchased before the expiry of your manufacturer’s warranty and it normally extends beyond the original warranty coverage but does not cover damages caused by accidents.
According to MoneyCrashers.com, MBI premiums are calculated based on policy length, vehicle condition/quality (both new and old), mileage traveled as well as other factors. Sometimes you can add MBI onto your existing auto policy. The process is simple: when a repair is needed, make a claim with your insurer who will then guide you through the rest of the procedure. Mainly this involves contracting an authorized mechanic for doing repairs while also paying off him or her once they are done. A deductible must usually be paid just like other forms of insurance.
It needs to be noted that not all insurers provide MBI and not all cars qualify for such policies. For example high value vehicles might not qualify for some covers. Just check with your local insurance agent if it falls under this bracket or category.
What Does Mechanical Breakdown Insurance Cover?
Now that you know what MBI stands for, what types of features does it generally have? Most plans contain various elements including:
– Towing
– Rental vehicle provision
– Roadside emergency support throughout the day 24/7
– Lockout services.
– Car hire (for a replacement vehicle)
– Engine
– Drivetrain
– Transmission
– Brakes
– Pipe work (exhaust)
– System for power supply
As illustrated, it can be cost-effective to get MBI especially if you are planning expensive repairs like an engine or transmission issue and which may result to huge amounts of money. Instead of paying the entire amount of your repair bill, you could pay just $250 or $500 deductible. This brings about big savings.
What Is Not Covered by Mechanical Breakdown Insurance?
MBI does not cover all possible risks. Some common examples include:
– Routine maintenance visits
– Tire problems
– Negligence
– Car wrecks
– Wheel alignments
– Spark plugs replacing job; and / or,
– The brake pads
– Rust/corrosion issues affecting cars engines’ parts and surfaces including other parts of the vehicle that easily wear out due to different daily driving conditions are also some of its exemptions.
– Tyre rotation service is best provided at auto service centers.
Check with your local insurance agent for complete exclusions list.
Who Provides Mechanical Breakdown Insurance?
Here are some providers to consider if you decide on MBI. Offerings might vary depending on location, so it’s worth shopping around in such cases.
GEICO: Available only on vehicles aged less than 15 months and have been driven for less than 15,000 miles. Offers coverage which may last up to seven years, or 100,000 miles.
Progressive: offers what should technically be called extended warranties but are really MBI’s through another company altogether.
Mercury: An insurance firm that covers both new and used vehicles provides these with round-the-clock road-side car support as well as rental car assistance; tire protection; trip interruption benefits etc.
MBI vs Extended Warranties
Why choose MBI and not a typical extended warranty? Here are the main differences:
Deductibles are typically under $100, but you have to use a designated repair or dealership. However, getting into technical details is important.
Extended warranties: are usually paid upfront, don’t follow state insurance laws and can be issued by third parties or the manufacturer. Yet it must be noted that these terms get complicated in practice.
MBI: It goes for longer period than extended warranties and gives all-inclusive protection within this lengthy duration of time. This allows more options of where to take your car for repairs unlike when dealing with normal policies. The deductible may be higher but it is still cheaper in the long run.
Mechanical Breakdown Insurance or Extended Warranty?
The decision on whether to purchase mechanical breakdown insurance (MBI) as opposed to an extended warranty depends on plans for your vehicle and emergency funding. For MBI to make sense, ValuePenguin says that the breakdown must exceed both the plan’s total value and the deductible involved. Repairs for engine or gearbox problems can quickly accumulate; making MBI potentially cost-effective.
Some mechanics claim that modern cars, particularly those at lower price points, do not require MBI. First-time issues are often covered by the manufacturer’s warranty while additional peace of mind can be given by purchasing an MBI policy if desired.
Expand Your Vehicle Coverage
This article will examine alternatives to traditional extended warranties regardless of whether you should buy mechanical breakdown insurance or not. Information regarding cars pays off big time here because without it you turn vulnerable like a baby. Not knowing how to keep your car running right and who will fix it could mean having enormous debt versus a low deductible plan that provides peace of mind.
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