Well as they say “it hit me when I was at my weakest”. That’s exactly what happened with me recently. I enjoyed the 4 years of free service and maintenance on my BMW, and believe it or not, as soon as the fifth year started the engine light turned on.
I knew of an old trick that if you play around with the gas cap this engine light goes away, and it did for sure, only to come back for good to not go away.
And as I was out of the warranty, I didn’t want to take it to the dealer as dealers are expected to charge higher, so I found a garage who handles German cars and has BMW certified technicians, and got the car fixed for some $450 (some engine thermostat got busted).
After few months I started shopping for the car insurance and found a very good quote from All State and almost switched, but then I saw that I was paying for some extra coverage called MBI (Mechanical Breakdown Insurance) in my current insurance from Geico. Well to be honest at this point of time I had no clue on what it was, and how good it was and is for my situation.
The first thing I did was was to call Geico to understand what is this MBI and why am I paying $$$ for the same. And on my very first call itself I was pleasantly surprised when they explained that MBI is Mechanical Breakdown Insurance, and it covers any and all mechanical issues which might happen to my car engine and then they issued me check for that repair I did few months ago (of course after deducting the $250 deductible).
Had I known about this insurance coverage, I would have taken my car straight to the dealer without any worries. Allstate didn’t have that MBI, so I didn’t switch my insurance. Geico had me on this MBI as they added that when I added the new car.
So what is a MBI or Mechanical Breakdown Insurance?
Typically we have comprehensive auto coverage, but that does not include mechanical breakdowns as one might think. As the name itself suggests, Mechanical breakdown insurance (MBI) covers repairs that are mechanical in nature. These breakdowns must be totally unrelated to auto accident damages. It only covers in the situations where there is an issue with or damage to the mechanical parts of the car, or they have completely broken. Mechanical issues can include things such as:
- Damaged Thermostat
- Broken heater
- Valve replacements
- Electrical system issues
- Bad brakes (not normal wear and tear though such as break pads)
- Transmission failure
These are just a few examples of things an MBI policy can cover, and the actual list can be very long and you should refer the same before you add this insurance to your coverage.
Mechanical Breakdown Insurance VS. Extended Warranty
The closest alternative to MBI is an extended warranty from the dealers. But in my case, it was very expensive from the BMW dealers so I didn’t take it and paid for high costs for repairs.
The expense of Mechanical Breakdown Insurance is normally more affordable in relation to the extended warranty in the dealer. Generally, MBI provides better coverage at a cheaper price than the typical dealer extended warranty and usually MBI includes all parts and systems, and not just the specific list of items covered by most dealer warranties. It saves you money, charging only a small premium per each policy period (well you need to check for your coverage, at least for me it was great), instead of a large lump-sum payment upfront.
Mechanical Breakdown Insurance can offer you the length of time you maintain the coverage and flexibility in both payment provisions.
Also it doesn’t require you to pay an enormous lump-sum at the time of purchase of your automobile because dysfunction insurance is managed to be an insurance policy. In addition, it will not force such as an extended warranty would you to fund the coverage by means of your auto loan this may help you save money on interest.
Few reasons to purchase Mechanical Breakdown Insurance as an alternative to an Extended Warranty
- May contain systems and more components than most dealer guarantees
- Will probably cost at the car dealer
- You are able to get your auto wherever you need fixed
- May be transferable to a brand new vehicle owner or it is possible to cancel it at any moment rather than lose the cash
- You tend not to need certainly to cover a large lump-sum payment in the event the price gets bundled into your auto loan and pay interest
And now to conclude this discussion, I believe its a great insurance to have you covered in the situations of expensive repairs after your factory warranty is over. This makes all the more sense in case you own a premium car, as the repair and maintenance on these cars is really expensive.