From liability coverage to mechanical breakdown insurance (MBI), drivers can choose from multiple types of insurance for car repairs. Liability insurance pays for damages to another person’s car when you are at fault for an accident. Mechanical breakdown insurance pays for auto repairs caused by a parts failure on your vehicle.

In this article, we’ll show you how to take advantage of liability insurance and explain whether mechanical breakdown insurance is a good idea. We’ll also look into the best extended auto warranty companies to see how their plans compare to mechanical breakdown coverage.

What Is Car Repair Insurance?

Car repair insurance usually refers to mechanical breakdown insurance, which covers the cost of repairs resulting from mechanical failure. MBI differs greatly from standard policies, as most insurance plans pay for vehicle repairs resulting from car accidents, environmental factors, or theft and vandalism.

Insurance for car repairs, such as MBI, is not required in any state. This car insurance coverage is also not offered by all insurance providers, since it’s less popular and pretty similar to extended car warranty plans.



Does Standard Insurance Cover Car Repairs?

Insurance for car repairs and mechanical problems is not included in most car insurance plans. The seven most common types of car insurance are:

  • Bodily injury liability coverage
  • Property damage liability insurance
  • Collision coverage
  • Comprehensive coverage
  • Uninsured/underinsured motorist coverage
  • Medical payments (MedPay)
  • Personal injury protection (PIP)

Each type of coverage only goes into effect after there has been an accident or external event that damages your vehicle. If your car experiences a mechanical breakdown due to worn, faulty, or malfunctioning parts, a car insurance company will not normally provide compensation.

If you have a new car, mechanical issues may be covered by your manufacturer’s warranty plan. These typically provide three years of bumper-to-bumper coverage and five years of powertrain component protection. Here’s a breakdown of how these types  of coverage compare:

Tables showcasing the differences between powertrain warranties and bumper-to-bumper warranties, and what makes them different

For longer coverage lengths, turn to a factory extended warranty, one of the most reputable extended car warranty companies, or a provider of insurance for car repairs.



Top Types Of Auto Insurance

There are many kinds of car insurance packages available. Most states require liability insurance but make other types of insurance optional. See the chart below for a breakdown of the major repairs each type of insurance or vehicle service contract covers.

Type of Coverage

What It Covers

When It’s Used

Bodily injury liability insurance

Medical bills for other drivers

After an accident where you are at fault

Property damage liability insurance

Damages to other drivers’ vehicles

After an accident where you are at fault

Collision coverage

Damages to your vehicle

After an accident where you are at fault

Comprehensive coverage

Damages to your vehicle

After your vehicle is damaged due to theft, vandalism, flying objects, or natural disasters

Uninsured/underinsured motorist insurance

Damages to your vehicle

After an accident where the other driver is at fault and doesn’t carry proper insurance

Medical payments

Your medical payments

After any accident in an at-fault state

Personal injury protection

Your medical payments

After any accident in a no-fault state

Mechanical breakdown insurance

Repair or replacement of covered components

After mechanical breakdown

Extended warranty or

vehicle service contract

Repair or replacement of covered components

After mechanical breakdown

Of the coverage choices above, only mechanical breakdown insurance, extended warranties, and vehicle service contracts provide coverage for car repairs. If you’re looking for peace of mind that car components such as your fuel system, electrical system, and air conditioning are covered from mechanical breakdowns, it’s worth checking these options out.

Mechanical Breakdown Insurance vs. Extended Warranties And Vehicle Service Contracts

Mechanical breakdown insurance tends to cover many of the same components as an extended warranty or a vehicle service contract. All are designed to provide insurance for car repairs that are not the result of an accident.

MBI policies are sold as insurance through state-licensed insurance companies. As insurance policies, they are subject to state insurance regulations. Extended warranties are offered through dealerships, while vehicle service contracts are sold through third-party companies unaffiliated with the brands they cover.



Is Insurance For Car Repairs Worth It?

Insurance for car repairs is worth it when drivers are looking for peace of mind that their cars are protected against unexpected and expensive repairs. While the effectiveness of coverage depends on your car’s reliability, it’s usually a good idea to have this backup plan.

Below are some of the pros and cons of purchasing insurance for car repairs:

Insurance For Car Repairs: Pros And Cons

Pros of Insurance for Car Repairs

Cons of Insurance for Car Repairs

Covers repairs through low monthly payments

Doesn’t always pay for itself

Helps with planning for unexpected repairs

Has exclusions on certain parts and on routine maintenance costs like oil changes

Provides peace of mind on the road

May not be necessary on reliable vehicles

Often offers additional benefits such as roadside assistance

For many drivers, purchasing a vehicle service contract is an excellent way to get insurance for car repairs. Third-party extended warranty coverage keeps policyholders safe while offering peace of mind on the road. Choices from third parties also tend to cost less than automakers’ plans and offer benefits such as rental car reimbursement and roadside assistance.



Recommendations For Extended Car Warranties

Not every extended car warranty company is the same, so be sure to choose a provider that pays claims out reliably and efficiently. Two of the industry’s top choices are CarShield and CARCHEX.

CarShield: Best Monthly Payments

CharShield has been offering low-cost warranties with generous financing terms for over 15 years. We contacted CarShield for quotes on the premium Diamond plan, which provides coverage similar to that of some new car factory warranties, for a 2018 Honda Civic. We were offered the following terms:

  • Term length: 5 years/70,000 miles
  • Financing: $88.78 for 18 months
  • Down payment: $295
  • Deductible: $100
  • Total cost: $1,708.03
  • Cost per year of coverage: $341.61

CARCHEX: Best For Used Cars

CARCHEX customer service stands out across the industry, as seen by the company’s A+ rating from the Better Business Bureau (BBB). Coverage terms reach as high as 250,000 miles, and overall costs from CARCHEX remain low.

We asked CARCHEX for a quote on the premium Titanium plan–the company’s highest level of coverage–for a 2018 Honda Civic and were offered the following terms:

  • Term length: 7 years/125,000 miles
  • Financing: $107.25 for 24 months
  • Down payment: First month’s payment
  • Deductible: $100
  • Total cost: $2,574
  • Cost per year of coverage: $367.71

Frequently Asked Questions

How We Rate Warranty Providers

Our review process aims to deliver consistent and unbiased assessments of extended auto warranty providers. While there are multiple qualities that make a warranty company successful, our review team focuses on those we believe are the most important for consumers:


  • Reputation: It’s important that an extended car warranty company is able to meet its claims obligations. Companies with a strong rating from the Better Business Bureau (BBB) score well in this category. Established providers with a long history of reliable service also receive positive marks.
  • Coverage: Our team of experts looks at the number of extended warranty plans available, as well as term limits, exclusions, and added benefits like roadside assistance. Ratings also take into account the availability of maintenance coverage.
  • Cost: Cost can be difficult to compare between providers because so many factors impact vehicle service contract pricing. To determine our cost score, we perform a secret shopper analysis for a variety of vehicles and plans and consider available deductibles.
  • Transparency: Our team evaluates the availability and transparency of each company’s contracts, as well as whether each provider offers a money-back guarantee.
  • Customer Experience: We listen to real customer sales calls and comb through reviews on sites like the BBB to learn about customer experiences. Warranty companies with a low volume of complaints score well in this area. We also consider the availability of mobile apps and chat features.

*data accurate at time of publication

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