What is mechanical breakdown insurance?

Definition:

Mechanical breakdown insurance is a type of coverage that pays for the repair costs of your car if it breaks down or fails in some way.

How does mechanical breakdown insurance work?

Mechanical breakdown insurance is a policy that covers repair, replacement, and other service costs for your car as a result of failure or defect. This type of coverage can reduce the expenses that an individual incurs out of pocket to fix the car and provides a type of coverage that is generally not included with a standard insurance policy.

What does mechanical breakdown insurance cover?

Mechanical breakdown insurance covers failures and defects in parts and systems of your car. Generally, your policy may come in this form or that. Some policies may explicitly mention the parts and systems covered in your car. Other policies may cover all parts and systems unless explicitly excluded.

Examples of parts and systems that mechanical breakdown insurance may cover:

• Engine
• Transmission
• Drive axle assembly
• Heating and cooling system
• Electrical system
• Steering system
• Brakes
• Fuel delivery system
• Suspension system

What is the average cost of mechanical breakdown insurance?

The cost of mechanical breakdown insurance depends on the insurance company with which you sign the policy. These policies are typically very affordable and range from $50 to $100 per year. Of course, your insurance premium is not the only expense you will incur. If you need to file a claim, you will also have to pay the deductible that you must cover before the insurance company pays the remainder of the claims, up to your coverage limits. Deductibles for mechanical breakdown insurance range from $100 to $500, with an average deductible around $250.

Mechanical breakdown insurance vs. extended warranty: What’s the difference?

Mechanical breakdown insurance and extended warranties have some things in common. First, both typically offer coverage for a limited time. Mechanical breakdown insurance may cover vehicles up to a certain age or mileage. In contrast, an extended warranty covers a certain number of years after the policy is purchased. Thus, it can cover older vehicles.

However, there are some significant differences between these two policies. While mechanical breakdown insurance requires a small premium when you pay your insurance premium, extended warranties often require a large upfront payment.

Mechanical breakdown insurance usually allows you to have your car repaired at the repair shop of your choice. But in the case of an extended warranty, you may have to have your car repaired at a dealership or with an authorized repair shop.

Do I need mechanical breakdown insurance?

Mechanical breakdown insurance can save you money on car repairs. The cost of mechanical breakdown insurance can be very low, typically ranging from $50 to $100 per year. Meanwhile, the cost of a new transmission or new engine can run into thousands of dollars. It’s a small price to pay for the opportunity to save a lot of money.

However, mechanical breakdown insurance is not for everyone. First, many insurance companies offer this type of coverage only for new or low-mileage vehicles. Therefore, if you have an older car or a high-mileage vehicle, you may not even be eligible to enroll in mechanical breakdown insurance.

Mechanical breakdown insurance may not be necessary for the owner of a comprehensive vehicle warranty either. If you have a warranty that covers all parts and systems, you likely do not need mechanical breakdown insurance.

Frequently Asked Questions (FAQs)

Who offers mechanical breakdown insurance?

Mechanical breakdown insurance is typically offered by insurance companies as an add-on to an auto insurance policy. Some credit unions also offer this type of coverage.

How can I file a claim on mechanical breakdown insurance?

The process

Filing a mechanical breakdown insurance claim is the same process as filing any other car insurance claim: contact your insurance company’s claims department or your local agent.

What is the oldest age a vehicle can be and still be covered by mechanical breakdown insurance?

Generally, mechanical breakdown insurance is available only for relatively new vehicles and those with low mileage. The age limit for a vehicle to still be covered depends on the insurance company.

Source: https://www.thebalancemoney.com/what-is-mechanical-breakdown-insurance-6742120

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