Most of us rely on our cars in our daily lives. Nearly three-fourths of Americans use a car to get to work, and nearly 90% of us use our cars to buy groceries. Cars are really expensive these days—even used ones—but we simply cannot live without them.
This means that if your car breaks down it’s more than just an inconvenience for a lot of people—it’s a crisis. A car in the shop means a huge repair bill—and if you can’t afford to get the car fixed, it has an impact on every aspect of your life, from your ability to earn a living to your ability to keep the pantry stocked or access other vital services. If the idea of a car breakdown gives you extreme anxiety, you should consider mechanical breakdown insurance (MBI).
What is MBI?
Your standard auto insurance policy doesn’t cover any sort of mechanical breakdown. Mechanical breakdown insurance covers the primary mechanical systems of your vehicle—the engine, the transmission, the drivetrain, brakes, and electrical system. Policies differ, so you might find MBI that covers more than these basics, or that includes exceptions. Most MBI policies won’t cover maintenance like tuneups, fluid changes, new tires, or specific parts like brake shoes that wear out and need replacement. Again, specific policies will list different exclusions. Typically, MBI is added to your existing insurance policy as an endorsement, but you can purchase it as a standalone policy as well.
Costs
Mechanical breakdown insurance is typically less expensive than an extended warranty on a newer car; most policies run between $30 and $100 annually—extended vehicle warranties can run into the thousands. Like all insurance, MBI comes with a deductible, usually around $250. Considering that the average repair bill on a car is about $550 (and something like a fuel pump replacement can easily exceed $1,000), that’s a pretty good deal, and becomes an even better deal if you don’t have any warranty options on your car at all.
Eligibility
Most MBI policies are offered on newer cars—typically less than 15 months old, with fewer than 15,000 miles. Once you have the coverage, however, you usually have the option to maintain it for a period of time—seven years, typically, or up to 100,000 miles on the odometer. These numbers vary between insurers, however, so you’ll need to check with individual insurers to get specifics.
If you have an older car or a used car, you can still buy MBI. Good Sam offers a standalone MBI policy for cars that are 10 years old or newer with fewer than 100,000 miles, for example, and Mercury Insurance offers MBI for cars seven years old or newer with 100,000 miles or fewer. One thing to keep in mind is that many MBI policies specify that coverage ends once your car hits a certain age or a specific number of miles. For example, if you buy a policy for a car that has 90,000 miles and it states that coverage ends at 100,000 miles, the moment your odometer rolls over to 100,000 your car is no longer covered.
Finally, unlike other car insurance policies, no personal information like your driving record is taken into account. The details of the policy are determined solely by the age and condition of your car.
Is MBI worth it?
So, is mechanical breakdown insurance worth it? If your car has an active warranty from a dealer, probably not. You’ll want to read your warranty details carefully to make sure it covers everything that MBI would cover, but if it’s in force and you’ve already paid for it (or its cost is rolled into your monthly payments) MBI probably isn’t necessary.
If your standard warranty is expired, however, MBI is a good idea. It’s generally cheaper than an extended warranty, and can save you a lot of money if your car suddenly breaks down. Considering the financial impact of a car breakdown is enhanced by missed work (and missed paychecks), being able to immediately get your car repaired as opposed to having to cobble together the money can be a huge relief.