5/B - Mechanical Breakdown

Question 1

Mechanical Breakdown Insurance (MBI)

Answer 1

Covers losses due to breakdown of motor vehicles

• Paid for by premiums
• Usually only sold for newer vehicles

Question 2

Coverage

Answer 2

MBI Policies cover the breakdown of:

• engines
• transmissions
• drive trains
• steering mechanisms
• electrical and electronic systems
• a/c systems
• front suspension

Question 3

Maintenance Features of MBI Policy

Answer 3

MBI Policies may require:

• proof of regular maintenance
• full inspection before the policy is issued

Repair costs cannot exceed the car’s ACV.

Question 4

MBI Exclusions

Answer 4

Breakdown Policies Do Not cover breakdowns:

• due to neglect or delay in maintenance
• covered by regular auto insurance
• due to racing or reckless driving
• on vehicles with altered odometers
• occurring while towing with or overloading the vehicle

They also do not include towing or roadside assistance.

Question 5

MBI Conditions

Answer 5

Common Conditions:

• The owner must take reasonable care to minimize repair costs
• Vehicle may be subject to inspection before repairs are done
• Subject to subrogation