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What Is Mechanical Breakdown Insurance?

Every year, there are roughly 69 million car breakdowns in the U.S. The cost to repair these breakdowns adds up to around $15 billion. Mechanical breakdown insurance can help protect you from these expenses. This is a type of car repair insurance that covers the breakdown of your car’s essential parts, such as your engine or transmission. Learn more about this coverage and how it works.

What Is Mechanical Breakdown Insurance?

Mechanical breakdown insurance is an optional coverage that helps pay for repairs and replacement parts if your car breaks down unexpectedly due to normal use. Even if you maintain your car, it is not uncommon for parts to fail. For example, electrical systems could short or your air conditioning system could struggle to maintain ambient temperature.

Keep in mind that mechanical breakdown insurance does not cover damage from an accident or crash, which instead is typically covered by standard auto policies. It also is not the same as roadside assistance coverage, meaning it will not cover flat tires or dead batteries. You also cannot use mechanical breakdown insurance to pay for routine maintenance, such as oil changes or new brake pads.

What Does Mechanical Breakdown Insurance Cover?

Mechanical breakdown insurance policies generally cover the failure of powertrain components, such as the engine and transmission. These two major components are expensive parts to repair on a vehicle, so mechanical breakdown insurance can save you a lot of money if you need to have them examined, fixed, or replaced entirely.

Other vehicle parts commonly covered with mechanical breakdown insurance includes:

  • Drive axle
  • Fuel system
  • Power/electrical system
  • Brakes system (not brake pads)
  • Air conditioning

Some insurers offer tiered mechanical breakdown plans, with lower tiers providing fewer coverages for a lower premium cost. If you’d like more comprehensive coverage, you may be able to upgrade to a premium plan that extends coverage to items such as steering and suspension systems.

Mechanical breakdown insurance does not overlap with standard car insurance coverages because standard auto policies only cover damages caused by a covered peril, such as an auto accident, storm damage, or vandalism. However, this coverage may overlap with extended warranty policies on your vehicle, so before purchasing optional breakdown coverage, ensure you are not already covered with a warranty to avoid paying for the same coverage twice.

What Does Mechanical Breakdown Insurance Not Cover?

Mechanical breakdown insurance typically does not cover standard wear and tear or basic maintenance services, such as:

  • Oil changes
  • Tire rotations
  • Repair or replacement of tires
  • Repair or replacement of belts and houses
  • Repair or replacement of brake pads
  • Repair or replacement of exterior trim
  • Repair or replacement of upholstery
  • Repair or replacement of windshield or window glass
  • Repair or replacement of wiper blades

Items or systems damaged from misuse, neglect, rust, corrosion, or usage of aftermarket parts are not eligible for mechanical breakdown insurance coverage. To ensure your vehicle is eligible for coverage, perform necessary maintenance and use authorized parts to keep your car running as smoothly as possible.

In addition, coverage does not extend to damage caused by an accident, which instead is covered through comprehensive or collision insurance

Auto Repair Insurance vs. Roadside Assistance Coverage

Mechanical breakdown insurance and roadside assistance coverage are not the same thing. While some mechanical breakdown insurance plans do include some roadside assistance coverage, it’s not common for roadside assistance to cover the repair of any mechanical components.

Roadside assistance is primarily for getting help if you suffer a breakdown away from home. For example, you may use roadside assistance it to help change a flat tire or get a tow to the nearest shop if your car breaks down en route to the office or on the highway. However, this service does not actually cover the cost of any repairs. Instead, roadside assistance helps prevent you from being stranded. Because of its coverage limitations, it is typically cheaper than mechanical breakdown insurance.

Mechanical breakdown insurance, on the other hand, can help cover the repair or replacement of an overheated engine or transmission failure. However, it does not necessarily cover the cost of a tow truck to transport you and your car to the shop. Overall, both coverages can work in tandem to ensure you can get your vehicle to the repair shop as well as pay for the repair itself.

Car Repair Insurance vs. Manufacturer and Extended Warranties

In many ways, an extended warranty and car repair insurance are similar. They can both cover mechanical breakdowns that happen unexpectedly, helping to save you from major repair bills, so you likely do not need both. However, they have a few crucial differences that might help you decide which to choose.

Mechanical breakdown insurance is considered an insurance product, so it’s regulated by your state’s insurance commissioner to somewhat standardize coverage. Extended or manufacturer car warranties, on the other hand, are a service plan that’s not considered insurance, so they are not subject to regulation. This can sometimes lead to unexpected exclusions or caveats, so be sure to read extended warranty policies carefully to ensure you understand the limitations.

Another big difference is that mechanical breakdown insurance is usually for newer, low-mileage vehicles. However, you can usually buy an extended car warranty much later in your car’s life.

Is Mechanical Breakdown Insurance Part of Standard Auto Insurance Policies?

Mechanical breakdown insurance is not included in standard auto insurance policies. While standard auto insurance policies typically have minimum coverage limits set by state laws, mechanical breakdown insurance plans can vary depending on who is providing them. However, like standard auto insurance policies, they’re still regulated by state insurance agencies to ensure comparable plans offer a similar array of coverage.

Mechanical breakdown insurance can also vary depending on the age and make of the vehicle. More expensive models are typically more expensive to insure. Generally, policies cover cars with up to 15,000 miles. If your car has more miles than that, you may be better off choosing an extended warranty instead.

How to File a Mechanical Breakdown Insurance Claim

Filing a claim for mechanical breakdown insurance likely follows the same procedure as filing any other type of auto claim. Follow the process your insurer prefers for submitting a claim. Typically, this will involve filling out a claim form online to explain the issue and get authorization for the repairs.

Once a claim is approved, you can usually take your car to an authorized repair shop for service. Depending on your insurer’s standard practice, you may pay for the service out of pocket and receive reimbursement from your insurer later, or your insurer may pay the shop for the service directly. However, in either case, you will be responsible for paying the deductible for the claim out of pocket directly to the repair shop. Be sure to document this payment for your insurer.

How Much Does Car Repair Insurance Cost?

Mechanical breakdown insurance is usually more affordable than average mechanical repair bills. Many policies range from $30 to $100 a year, with an average $250 deductible any time you need to make a claim.

On the other hand, a new engine for a 4-cylinder vehicle usually costs around $4,000. That goes up to $5,500 for a V6 and $7,500 for a V8, and does not include labor, which could be anywhere from an extra $1,100 to $1,800 on top of an already high unexpected expense.

Should You Get Mechanical Breakdown Insurance?

Mechanical breakdown insurance can be a worthwhile coverage for high-mileage drivers, as the more you drive, the more likely you are to suffer from mechanical failure even through normal usage. Those planning to keep their vehicles for more than 5 years may also benefit from mechanical breakdown insurance, as the older a car gets, the greater its chances of experiencing a mechanical breakdown.

Those interested in mechanical breakdown insurance can purchase a new stand-alone policy or add the coverage to your existing auto insurance policy. Insurers will likely ask about the age, condition, make, and model of your vehicle.

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