Mechanical Breakdown Insurance

Fact-checked with HomeInsurance.com

4 min read
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Part of being a car owner is dealing with vehicle repairs. Whether it’s a broken A/C system or a dead battery, car repairs can be expensive. Car problems are often unexpected, and most people don’t set money aside for potential repairs. With mechanical breakdown insurance, your insurance company helps pay for the cost of certain repairs.

What is mechanical breakdown insurance?

Mechanical breakdown insurance is a type of insurance policy that helps cover the cost of mechanical and electrical repairs for your vehicle. This type of coverage can be beneficial because it fills some gaps in your standard auto insurance policy.

Every company covers different repairs, but you can expect most policies to cover the following:

  • Brakes
  • Drivetrain
  • Engine
  • Exhaust
  • Heating and cooling system
  • Internal computer and GPS
  • Steering
  • Transmission

Mechanical breakdown insurance strictly covers internal systems and components. It does not cover damage resulting from an accident, nor does it cover exterior damage.

Mechanical breakdown insurance also doesn’t cover general maintenance, wear and tear, neglect, or tire issues.

Despite the term “breakdown,” mechanical breakdown insurance is not the same thing as roadside assistance. It won’t cover towing if you break down on the side of the road. However, if your car broke down because of engine failure or transmission issues, mechanical breakdown insurance would help cover the cost of repairs at an auto body shop.

How does mechanical breakdown insurance work?

Mechanical breakdown insurance works like a regular car insurance policy. If a system in your car malfunctions, you’ll contact the insurance company and file a claim. Depending on the problem, you might need to take the car to a mechanic to get an estimate for the cost of repairs.

Once your claim is approved, you’ll receive a payout for the repairs, minus the cost of your deductible. Most insurance companies allow drivers to take their car to a mechanic of their choosing. If you don’t have a mechanic, the insurance company can probably recommend one for you.

How much does mechanical breakdown insurance cost?

The cost of mechanical breakdown insurance depends on the company, but it’s anywhere from $20 to $100 a year based on the quotes we received. Unlike an extended warranty, the cost of mechanical breakdown insurance is automatically added to your auto insurance premium. There’s no need to make a separate payment.

Generally speaking, the more expensive a car is, the more money you’ll pay for mechanical breakdown coverage. Some luxury cars that are in the range of $100,000 and upwards may not be eligible for mechanical breakdown coverage because the cost of repairs is so high.

Which companies offer mechanical breakdown insurance?

There are a number of companies that offer mechanical breakdown insurance. Here are some of the providers that sell it:

Check your provider to see if it offers it.

What is the difference between mechanical breakdown insurance and an extended warranty?

Mechanical breakdown insurance is similar to an extended warranty in that they both cover the cost of certain vehicle repairs. However, there are a number of key differences.

An extended warranty tends to be much more expensive than mechanical breakdown insurance, but there usually isn’t a deductible required. Because extended warranties are not a type of insurance, you have to pay the full annual cost upfront, rather than monthly. When it comes to getting repairs, drivers with an extended warranty often have to take their car to an approved auto body shop.

The age of your car might also limit you from getting an extended warranty. Typically, only brand new cars and some lightly used cars qualify for an extended warranty. On the other hand, you can purchase mechanical breakdown insurance for a used car, as long as it’s under ~15,000 miles.

Is mechanical breakdown insurance worth it?

Ultimately, mechanical breakdown insurance is only worth it for certain repairs. For example, if you need to replace your engine, it might cost $4,000. That’s significantly more than you would spend on your insurance and deductible. In that case, mechanical breakdown coverage could save you a lot of money.

However, consider a less expensive repair. Say you need to replace your steering column, which will cost $300. If you’re paying $100 for insurance and have a $250 deductible, you’re paying more money out-of-pocket for insurance than the cost of the repair. In that case, you’re not saving any money by having mechanical breakdown insurance.

Another thing to consider is the age of your car. Older cars and vehicles with high mileage are more likely to break down. If your car isn’t the most reliable model, a mechanical breakdown policy might be worth the money.

So, who shouldn’t consider mechanical breakdown coverage? New car owners. If you buy a new car from a dealership, it likely comes with a warranty. If you purchase mechanical breakdown coverage, you would ultimately be paying for duplicate coverage. Once the initial warranty ends, you might consider purchasing an extended warranty if you want to avoid a deductible.

Frequently asked questions

Does car insurance cover mechanical repairs?

No, standard auto insurance policies don’t cover mechanical, electrical or any other internal system repairs.

Car insurance strictly covers exterior damages to your vehicle after an accident, weather event, vandalism, and so on. If an internal system is damaged due to an accident, it’s possible that your car insurance will cover some of the cost.

Which company is the best for mechanical breakdown insurance?

There are a handful of companies that sell mechanical breakdown insurance, but there isn’t one in particular that is the best. Every company has their pros and cons, and charges a different price.

Some insurance providers offer additional perks with mechanical breakdown insurance, like rental car reimbursement coverage, so it’s important to shop around before settling on a provider.

Is mechanical breakdown insurance the same as roadside assistance?

Mechanical breakdown insurance and roadside assistance are different types of coverage. If your car breaks down on the side of the road, you’ll need to call roadside assistance for towing or on-the-spot repairs. But if your car breaks down because of a dead battery, you can use mechanical breakdown insurance to pay for a replacement.