Your standard car insurance policy covers a lot, but it doesn’t cover the cost of vehicle repairs unless they’re caused by a covered peril. The average driver spends nearly $550 per year on car repairs, and the cost to fix complex mechanical issues can add up quickly. For extra financial protection from unexpected vehicle issues, you may want to consider mechanical breakdown insurance. While this optional coverage is similar to an extended warranty for your car, you typically purchase it from a car insurance company as an endorsement or standalone policy.

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What is mechanical breakdown insurance?

Mechanical breakdown insurance, also called car repair insurance, is a type of insurance policy or an endorsement to your auto 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 car insurance 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 — that is covered by a full coverage auto insurance policy — nor does it cover exterior damage. Car repair insurance also typically 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, which is sometimes called car breakdown insurance. 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 will 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 should 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 car repair insurance varies based on a number of factors, the first of which is the company that you purchase your coverage from. Every company sets its own rates, and just like with the cost of auto insurance, prices will vary. Additionally, you may pay more if you purchase a standalone mechanical breakdown policy rather than adding coverage as an endorsement to your auto insurance policy.

The type of car you drive could also impact the cost of this coverage. The cost for mechanical breakdown insurance will likely be higher for vehicles that cost more to repair. For example, because luxury cars will typically cost more to fix than standard private passenger cars, car repair coverage for a luxury vehicle will likely be more expensive than it is for your daily car.

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:

Checking with your provider to see if it offers mechanical breakdown insurance might be the fastest way to see if you have access to this coverage.

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 typically does not come with a deductible, whereas mechanical breakdown insurance does. However, extended warranties may be more expensive than car repair insurance, averaging between $1,300 and $4,600 per year.

Additionally, because extended warranties are not a type of insurance, you may have to pay the full cost up front, rather than having the option to pay in installments. 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 might be able to purchase mechanical breakdown insurance for a used car, as long as it’s under ~15,000 miles. However, each company will have its own guidelines about which cars qualify for car repair coverage.

Is mechanical breakdown insurance worth it?

Ultimately, purchasing mechanical breakdown insurance is a personal decision. It may be worth it for some and not for others.

For example, if you need to replace your engine, it might cost $4,000. That’s significantly more than you are likely to spend on the insurance coverage 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 might be 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 might want to skip mechanical breakdown coverage? New car owners. If you buy a new car from a dealership, it might already come with a warranty. If you purchase mechanical breakdown coverage, you could 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

    • No, standard auto insurance policies do not cover the costs of mechanical, electrical or other system repairs to your vehicle. Car insurance only covers the costs for damages and repairs from an accident, whether you have a full coverage car insurance policy or a minimum coverage policy. If you want coverage for mechanical failures, you would need to purchase a standalone mechanical breakdown insurance policy or add an endorsement for this type of coverage to your current auto insurance policy.
    • It depends on what caused them. Comprehensive coverage pays for damages caused by theft, vandalism, storm damage and hitting an animal. It is often called “other-than-collision” coverage. If you have mechanical issues in your car after a covered loss, your comprehensive coverage could pay the repair bills. However, if your vehicle breaks down outside of a covered loss — your engine spontaneously fails, for example — you would need mechanical breakdown insurance for coverage.
    • 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. This is why it can be helpful to request quotes from several car insurance companies to find the best for your budget and coverage needs. Comparing quotes could help you find the best company for mechanical breakdown insurance.
    • No, mechanical breakdown insurance is not the same as roadside assistance. Roadside assistance is intended to help cover the costs related to towing or roadside assistance when your vehicle breaks down on the side of the road. Conversely, mechanical breakdown insurance does not cover costs associated with towing your car. However, if your car breaks down due to a mechanical malfunction such as a dead battery, you can use mechanical breakdown insurance to cover the battery replacement.