Geico Mechanical Breakdown Insurance - Is it worth it

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
Post Reply
Topic Author
FB01
Posts: 689
Joined: Fri May 20, 2011 12:36 am

Geico Mechanical Breakdown Insurance - Is it worth it

Post by FB01 »

Hi,

I just bought a new Honda Odyssey van and my insurance is with Geico. I was checking and they have added Mechanical Breakdown Insurance which is $36 for 6 months. The van is my secondary vehicle and will be using in the weekend for pleasure trips so will be using using 4000-5000 miles for 6 months.. (may be less)

Is Mechanical Breakdown worth its value? Below is the details from Geico website. Any suggestions and views are appreciate.

"Multi-Risk is a package of coverages that includes Comprehensive, Collision and Mechanical Breakdown Insurance (MBI). MBI coverage protects you from expensive auto repair bills when your car experiences a mechanical failure. It is more affordable and offers more protection than the Extended Warranty offered by your car dealership.

Mechanical Breakdown Insurance covers many mechanical repairs to your car, protecting you from expensive repair bills. This coverage is only available for vehicles with less than 15,000 miles that have been purchased within the last 15 months. A $250 deductible per claim applies. Mechanical Breakdown Insurance is similar to a dealer's extended warranty protection. It's in excess of coverage provided by the manufacturer's warranty.

EXCLUSIONS: MBI does not include regular maintenance services such as tune-ups, suspension alignment, wheel balancing, filters, lubrication, coolant and fluids, spark plugs, brake pads and lining, brake shoes and tires (includes tire wear and/or tire damage). Breakdown repairs made necessary by intentional damage, rust and oxidation, misuse, or improper maintenance are not covered. Mechanical Breakdown coverage is in excess of coverage provided by the manufacturer's warranty.

Once you've purchased MBI, you can renew it for up to seven years or 100,000 miles (whichever comes first). After a $250 deductible on a covered loss, MBI covers repairs to all mechanical parts of the car (except for maintenance and wear and tear*). Interested? Call us at (800) 861-8380 to learn more."
Thanks, | FB
User avatar
Toons
Posts: 14459
Joined: Fri Nov 21, 2008 9:20 am
Location: Hills of Tennessee

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by Toons »

Honda product.
Mechanical breakdown insurance?
Personally I would pass.
Crv owner here,Fit and Civic in the past.
Take care of the vehicle :happy
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
sport
Posts: 12084
Joined: Tue Feb 27, 2007 2:26 pm
Location: Cleveland, OH

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by sport »

It seems to provide coverage only for the first 15 months and 15K miles. So, most of this duplicates the manufacturer's warranty. Also, the likelihood of a Honda breaking down in the first 15 months with less than 15K miles, is not very likely. I would pass on this.
TOJ
Posts: 373
Joined: Wed Mar 02, 2016 8:19 pm

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by TOJ »

sport wrote:It seems to provide coverage only for the first 15 months and 15K miles. So, most of this duplicates the manufacturer's warranty. Also, the likelihood of a Honda breaking down in the first 15 months with less than 15K miles, is not very likely. I would pass on this.
No, you can keep it for 7 years from date of purchase.

We have it on our Sienna. It is much cheaper than an extended warranty the dealer would sell you. I don't think overall it is an excellent value (due to the deductible), but the cost and lack of a long dealer warranty made us get it. A single expensive repair would make it worth it. Over 7 years, if you don't have an expensive repair, you're out $504. Not bad.
Last edited by TOJ on Thu Aug 18, 2016 11:30 am, edited 1 time in total.
mervinj7
Posts: 2496
Joined: Thu Mar 27, 2014 3:10 pm

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by mervinj7 »

Call and find out if the premiums increase after the first year. Otherwise, over 7 years, $504 ($36*2*7) is not too bad for piece of mind on covered repairs. However, for the first 3 years it doesn't seem worthwhile since you will be already covered by Honda's factory warranty. So what you are really buying is a (relatively cheap) extended warranty for years 4-7 (assuming the premiums don't increase).
ArmchairArchitect
Posts: 336
Joined: Thu Nov 05, 2015 9:37 am

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by ArmchairArchitect »

Also figure out whether any claims for this coverage would be recorded in the CLUE database, thereby increasing your overall auto premiums (with any insurer).
SimonJester
Posts: 2500
Joined: Tue Aug 16, 2011 12:39 pm

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by SimonJester »

TOJ wrote:
sport wrote:It seems to provide coverage only for the first 15 months and 15K miles. So, most of this duplicates the manufacturer's warranty. Also, the likelihood of a Honda breaking down in the first 15 months with less than 15K miles, is not very likely. I would pass on this.
No, you can keep it for 7 years from date of purchase.

We have it on our Sienna. It is much cheaper than an extended warranty the dealer would sell you. I don't think overall it is an excellent value (due to the deductible), but the cost and lack of a long dealer warranty made us get it. A single expensive repair would make it worth it. Over 7 years, if you don't have an expensive repair, you're out $504. Not bad.
For what its worth my 2004 Sienna which is now going on 12 years has not had a single mechanical breakdown. Pocket the $754, ($504 plus the $250 deducible if you ended up using it) and come out ahead.
"They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety." - Benjamin Franklin
User avatar
David Jay
Posts: 14569
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by David Jay »

Insurance is never "worth it", the insurance company has to cover overhead costs. So the insurance company is paying out, on average, well less than $504 (if that is the premium) per policy.

If you can't afford to self-insure, sometimes insurance is needed (I will carry homeowners insurance even after the mortgage is paid off, for example). But ALL insurance a bet against the house.
It's not an engineering problem - Hersh Shefrin | To get the "risk premium", you really do have to take the risk - nisiprius
User avatar
LadyGeek
Site Admin
Posts: 95484
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by LadyGeek »

This thread is now in the Personal Finance (Not Investing) forum (insurance).

I can't see the reason for this insurance. It's secondary to a manufacturer's extended warranty, what could be covered that an extended warranty does not? If you're concerned about breaking down, add a towing option to the policy which is a LOT cheaper.

As for extended warranties, let's take a look at the fine print:
FB01 wrote:EXCLUSIONS: MBI does not include regular maintenance services such as tune-ups, suspension alignment, wheel balancing, filters, lubrication, coolant and fluids, spark plugs, brake pads and lining, brake shoes and tires (includes tire wear and/or tire damage). Breakdown repairs made necessary by intentional damage, rust and oxidation, misuse, or improper maintenance are not covered. Mechanical Breakdown coverage is in excess of coverage provided by the manufacturer's warranty.
I underlined "such as" to emphasize that is not a comprehensive list. I just experienced an exception that's not mentioned in manufacturer or extended warranty packages. What is it? Struts.

It was time to replace the OEM tires on my 2012 Honda CR-V. I went to my local tire place and unexpectedly discovered that 3 of the 4 strut seals had blown and were leaking fluid. That would explain why my ride seemed to be getting harsher over time. It was more than the tires. :annoyed

The strut seals should not have failed with only 37,000 miles. However, my car is 4 years old and the manufacturer's warranty period had expired. Is it covered under my 5 year 60,000 mile power train warranty? Nope, struts are not part of the power train.

Both the local shop and the dealer were very clear that struts are considered maintenance items. No warranty will cover them. So... $1,100 later, I have 4 new struts. This is a fair price - not the cheapest, but fair. The local shop did the work, as you need to know what you're doing. It turned out that the bolts through the rear anti-sway bars were rusted and they had to cut them off with a torch, replace the bars, and get new bolts from the Honda dealer. Fun stuff, they earned the labor.

That doesn't include the money I spent for 4 new tires and alignment. The alignment was fine.

I'm glad I didn't buy the extended warranty when I purchased the car, as this failure would not have been covered. This unexpected expense is coming from my Emergency fund. The money is there for a reason, this is one of them.
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
User avatar
Earl Lemongrab
Posts: 7270
Joined: Tue Jun 10, 2014 1:14 am

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by Earl Lemongrab »

ArmchairArchitect wrote:Also figure out whether any claims for this coverage would be recorded in the CLUE database, thereby increasing your overall auto premiums (with any insurer).
Just because something is in CLUE doesn't mean that it will affect your rates. For instance, comprehensive auto claims generally don't affect your collision or liability rates.

Earl
User avatar
LadyGeek
Site Admin
Posts: 95484
Joined: Sat Dec 20, 2008 4:34 pm
Location: Philadelphia
Contact:

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by LadyGeek »

^^^ The wiki has some background info: CLUE database
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.
TOJ
Posts: 373
Joined: Wed Mar 02, 2016 8:19 pm

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by TOJ »

LadyGeek wrote:
I can't see the reason for this insurance. It's secondary to a manufacturer's extended warranty, what could be covered that an extended warranty does not?
Well, extended warranties are roughly twice this price, in my experience.
Topic Author
FB01
Posts: 689
Joined: Fri May 20, 2011 12:36 am

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by FB01 »

Thank you all for your feedback.

I called Geico and cancelled the MBI. They refunded the pro-rata charge back to my credit card.

-JR
Thanks, | FB
Zott
Posts: 243
Joined: Fri Jul 31, 2015 10:21 pm

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by Zott »

This illustrates something that really burns me up regarding GEICO. I like them very much otherwise, but they will sneak these coverages (like breakdown and towing) on your policy (I'm reading the original post to indicate that the OP didn't request this coverage, nor was he asked). I'm convinced that the phone reps are compensated for this. I found that it happened a couple of times after I called with a question or for service. No doubt many people never notice. I actually filed a complaint with the Insurance Dept of my state. Recently I haven't seen this added -- I end every phone call or change in coverage with explicit statement that I'm not interested in these coverages, but the reps always try to sell them during the course of a call. Last week the rep actually started the call (after verifying identity) making "sure" that I was aware that they were available. (I had a number of changes to make to my auto policy, didn't need this distraction). Being a reasonable guy, I blew up at her about it, she apologized and said she would note my record that the subject was not to be brought up in future calls. :oops:

Right.......be careful with them. :annoyed You know they must be big moneymakers.
Sir Tyne
Posts: 1
Joined: Fri Feb 24, 2017 8:50 am

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by Sir Tyne »

I have my cars insured with GEICO. When I bought my MINI Cooper JCW Countryman new in 2014 and called for a quote, the price they gave me included MBI (Mechanical Breakdown Insurance). I asked how much that added to the payment and they said only $53 additional on the 6 month premium and it covered everything except regular wear and tear items for 7 years or 100,000 miles. I asked if it covered the clutch on a 6 speed standard and they said yes. So last fall with 50,000 miles on my JCW Countryman, the clutch started slipping. I had it replaced at Mall of GA MINI and it only cost me the $250 deductible. So far I've paid $310 for the insurance and the deductible for a total of $515. Compared with the $2300 for a new clutch I am ahead $1785. And the good thing is if I were to sell the car tomorrow that is all I pay.
Alan S.
Posts: 12629
Joined: Mon May 16, 2011 6:07 pm
Location: Prescott, AZ

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by Alan S. »

The more a company pushes and advertises a fringe coverage, the more profit it makes for the company. That's less chance for you to benefit.

This is another form of extended warranty, which is offered on just about any hard goods you buy these days. These are all huge profit generators for those involved in the chain of distribution, in some cases more than the purchase of the product itself.

Yes, every once in awhile someone will benefit from purchasing one of these despite the premium being loaded for adverse selection, which is when most buyers already know something about the product or their use of the product that makes the coverage worth considering.
Jags4186
Posts: 8198
Joined: Wed Jun 18, 2014 7:12 pm

Re: Geico Mechanical Breakdown Insurance - Is it worth it

Post by Jags4186 »

I have MBI with Geico. You have to add it to your vehicles coverage within 15 months or 15,000 miles on the car. In the past this was a absolutely great deal as it was offered on unlimited mileage. I don't care what car you have but things start to break eventually. Now they've limited it to 100,000 miles and it is definitely less appealing.

My previous car was definitely a lemon. I used the MBI insurance multiple times and I found it to be incredibly easy to work with Geico. Take car to dealership, pay my $250, they fix the car. It costs $6 a month so I just pay it. My thought is that if something breaks I know I'm max out of pocket $250, I don't have to worry about getting ripped off by a mechanic. Also, in my experience, when the mechanic inevitably "finds something else" broken, you're still limited to the $250 for the visit not $250 for each specific thing wrong.

To give you an example of what Geico paid to be repair on my 2012 Jetta that went to the car grave in the sky at 90,000 miles:

2 New alternators plus 2 new batteries that failed due to alternators
Fuel pump
Engine block replaced (timing chain snapped at 65,000 pistons fell in the engine and it seized).

I paid $750 to have all of that replaced.
Post Reply