This insurance is similar to a warranty and is often purchased as an add-on to a standard auto insurance policy.
While it is primarily used for cars, trucks, and other vehicles, mechanical breakdown insurance can also apply to other types of equipment, such as home appliances.
Read: What Is Gap Insurance? And How It Works
Benefits of Mechanical Breakdown Insurance
Mechanical breakdown insurance offers several benefits that make it a valuable coverage for vehicle owners and businesses:
- Financial Protection: MBI provides financial protection by covering the cost of repairs or replacement parts due to mechanical or electrical failures. This can help you avoid unexpected and potentially expensive repair bills.
- Peace of Mind: Having MBI gives you peace of mind knowing that you are protected against sudden mechanical failures. This allows you to focus on your driving or business operations without worrying about potential breakdowns.
- Comprehensive Coverage: MBI can cover a wide range of mechanical and electrical components, including engines, transmissions, air conditioning systems, and more. This comprehensive coverage ensures that you are protected against a variety of potential failures.
- Cost Predictability: With MBI, you can better predict your maintenance and repair costs. Instead of facing unexpected bills, you pay a fixed premium for coverage, making it easier to budget for your vehicle or equipment expenses.
- Transferability: In many cases, MBI policies are transferable to new owners if you sell your vehicle. This can add value to your vehicle and make it more attractive to potential buyers.
Coverage Options
Mechanical breakdown insurance policies offer a variety of coverage options, including:
1. Vehicle Parts Coverage
MBI covers the cost of repairing or replacing various mechanical and electrical parts in your vehicle, such as:
- Engine: Coverage for engine components, such as the cylinder block, pistons, and valves.
- Transmission: Coverage for transmission components, such as gears, clutches, and the torque converter.
- Cooling System: Coverage for cooling system components, such as the radiator and water pump.
- Electrical System: Coverage for electrical system components, such as the alternator, starter, and wiring.
- Air Conditioning and Heating: Coverage for air conditioning and heating components, such as the compressor and blower motor.
2. Additional Coverage
In addition to covering specific parts and systems, MBI policies may also offer coverage for:
- Towing and Roadside Assistance: Coverage for towing and roadside assistance services in the event of a breakdown.
- Rental Car Reimbursement: Coverage for rental car expenses while your vehicle is being repaired.
- Trip Interruption Coverage: Coverage for additional expenses, such as meals and lodging, if your vehicle breaks down while you are traveling.
3. Exclusions
It’s important to note that MBI policies may have exclusions for certain types of damage or wear and tear.
For example, coverage may not apply to pre-existing conditions or failures caused by neglect or improper maintenance.
