You're cruising down State Highway 1 when suddenly your engine starts making an ominous knocking sound. Your heart sinks as you pull over, already dreading the repair bill. But hey, you've got comprehensive car insurance, so you're covered... right?
Not quite. This is where many Kiwi drivers get caught out, discovering too late that their comprehensive car insurance won't help with mechanical failures.
Let's clear up the confusion between Mechanical Breakdown Insurance (MBI) and Comprehensive Car Insurance, so you can make the right choice for your vehicle.
What is Comprehensive Car Insurance?
Comprehensive car insurance in New Zealand is the most extensive cover available to consumers when insuring your car. It typically covers repair costs for your own car due to accidents, theft, fire, vandalism, or natural disasters, regardless of fault. Additionally, it protects you financially if you damage someone else’s vehicle or property.
What comprehensive car insurance typically covers:
Accidents – Damage caused by a collision with another vehicle or object.
Theft & Fire – If the car is stolen or damaged by fire.
Weather-related damage – Damage from storms, floods, or hail.
Third-party property damage – Covers costs if a driver damages another person’s car or property.
What comprehensive insurance does not cover:
Mechanical breakdowns – Engine or transmission failures that aren’t accident-related.
Electrical system faults – Malfunctions in onboard electronics.
Wear and tear – Routine maintenance, brake pads, tyres, and batteries.
Since comprehensive insurance doesn’t cover mechanical failures, some drivers look for additional protection through Mechanical Breakdown Insurance (MBI), which specifically covers internal failures over time.
Now, let’s look at how MBI works and what it covers and doesn’t cover.
What is Mechanical Breakdown Insurance (MBI)?
MBI provides financial protection for unexpected mechanical or electrical failures that aren’t related to an accident. It covers internal failures that comprehensive insurance does not. One of the biggest reasons drivers consider MBI is the high cost of mechanical repairs.
According to Autosure (an MBI insurance provider in NZ), real claim data shows that:
Transmission repairs can cost up to $9,000
Head gasket replacements are around $5,500
Power steering repairs cost up to $4,000
Engine control unit (ECU) failures can cost $3,300 or more
Without MBI, these costs come directly out of pocket, which can be a major financial hit. For many drivers, having predictable MBI premiums is a safer alternative to risking unexpected repair bills.
What Mechanical Breakdown Insurance typically covers:
Engine and transmission repairs
Cooling system failures (radiators, water pumps)
Steering and suspension faults
Electrical system malfunctions
What Mechanical Breakdown Insurance typically does not cover:
Routine maintenance – Servicing, oil changes, tyres, and brake pads.
Pre-existing faults – Any issue that existed before taking out the policy.
Damage from neglect – If the vehicle hasn’t been maintained according to the manufacturer’s guidelines.
Here's a high level comparison showing how Mechanical Breakdown Insurance and Comprehensive Car Insurance compares side by side.
Feature | Comprehensive Car | Mechanical Breakdown |
Covers accident damage | Yes | - |
Covers theft & fire | Yes | - |
Covers third-party damage | Yes | - |
Covers engine & transmission failure | - | Yes |
Covers electrical system faults | - | Yes |
While comprehensive car insurance focuses on accidents, theft, and weather-related events, mechanical breakdown insurance is designed for unexpected mechanical failures that aren’t covered by standard policies.
Drivers should consider their vehicle’s age, reliability, and repair costs when deciding whether MBI is necessary.
What to look for with Mechanical Breakdown Insurance
Not all MBI policies are the same, and the fine print can make a big difference in what’s actually covered. Before signing up, ask yourself these key questions to make sure the policy suits your needs and budget.
Checklist Question | The why? |
How much will the policy actually pay out? | Read the maximum payout amounts per claim and per policy term. Some policies only cover a portion of expensive repairs. |
What’s NOT covered? | Watch out for exclusions—common ones include: - Pre-existing conditions - Modifications - Racing or commercial use - Regular maintenance items |
How easy is it to make a claim? | Claims experiences can vary, so it’s always good to check customer feedback. But don’t stop there—take a look at the insurer’s policy documents and dispute resolution process to get the full picture on how claims are handled. |
Is there a waiting period before I can claim? | Some policies have a stand-down period before coverage kicks in. Make sure you know when you're actually covered. |
Can I afford the payments? | Does the cost of the policy fit your budget, or would you be better off setting money aside for repairs instead? |
Choosing the right MBI policy isn’t just about what’s included—it’s also about making sure it fits your financial situation and needs. But even if MBI isn’t the right option for you, there are other ways to manage repair costs.
The bottom line
You can think of comprehensive insurance and MBI as complementary—like bacon and eggs—rather than competing products. Comprehensive insurance protects your car from external threats, while MBI guards against internal failures.
Whether MBI is for you depends on factors like:
Your car's make and model
Its age and mileage
Your financial situation
Your tolerance for risk
For many Kiwi drivers, especially those with European cars or high-mileage vehicles, having both types of cover can offer broader financial protection. However, policies vary, so checking what’s covered before deciding on the best option is crucial.
Alternative options
If MBI doesn't feel right for you, consider these alternatives:
Self-Insurance Fund: Set aside what you'd pay in premiums each month into a dedicated repair fund. This approach requires discipline but gives you more flexibility.
Extended Manufacturer's Warranty: Some car manufacturers offer extended warranty programs that might be more comprehensive than MBI for newer vehicles.
Regular Maintenance Plan: Investing in preventive maintenance can help avoid major mechanical failures, though it won't protect you from all possible issues.
Remember, the best insurance choice is one that lets you drive with confidence, knowing you're protected against the risks that matter most to you. Whether that includes MBI depends on your unique situation as a Kiwi driver.
No single approach works for everyone, so the best option depends on your vehicle, budget, and risk tolerance. Understanding what comprehensive insurance and MBI do—and don’t—cover can help you make a smarter choice about how to protect yourself from unexpected repair costs.
Getting a quote for Mechanical Breakdown Insurance (MBI)
Getting a quote on Mechanical Breakdown Insurance (MBI) doesn’t have to be complicated. In the past, you'd need to visit a car dealership to get a quote and cover. That can be time consuming and inconvenient for most Kiwis.
With Quashed.co.nz, you can now shop for Mechanical Breakdown Insurance policy online and find coverage that suits your car, budget, and repair needs—all in one place. Whether you drive a European model, a high-mileage vehicle, or just want extra protection, checking your options online can give you a better idea and help you to make a more informed decision.
Shopping for car insurance with Quashed.co.nz
Got your MBI insurance sorted and you're looking to shop and compare car insurance? Whether you’re looking for comprehensive cover, third-party insurance, or ways to reduce the cost of your car insurance, Quashed.co.nz can help provide you with more information to make better decisions.
You can compare, shop and track all your car insurance policies online with Quashed. It's the fastest way to compare premiums and policy benefits across a number of insurance companies in New Zealand.
Ready to start saving on your insurance today?
Join 50,000+ Kiwis using Quashed.co.nz to compare and shop for your insurance in one place.
Forget spending hours searching and comparing insurance across different websites. Sign up for free, shop and compare policies online, and find out how much you can save in just a few minutes.
Further Reading
Check out these related articles:
Motor Insurance NZ Guide – A complete overview of car insurance in NZ.
What Car Insurance Covers – Explains what’s included and excluded in policies.
Debunking Car Insurance Myths – Busting common car insurance misconceptions.
Why Is Car Insurance So Expensive? – Factors that drive up car insurance costs.
The Average Cost of Insurance in NZ – Breakdown of insurance costs across NZ.
FAQs
What’s the difference between Mechanical Breakdown Insurance and Comprehensive Car Insurance?
Comprehensive insurance covers accidents, theft, fire, and weather damage, but it won’t cover engine or mechanical failures unless caused by an insured event. MBI is designed to cover mechanical and electrical failures, like transmission breakdowns, that aren’t caused by a crash.
Is Mechanical Breakdown Insurance (MBI) expensive?
The cost of MBI varies depending on the type of car you have and the level of cover you desire. European cars, modified cars, and performance cars typically will cost more. However, you are able to select the level of cover and excess levels which can help to bring costs down.
Is Mechanical Breakdown Insurance (MBI) worth it in New Zealand?
MBI might be a good option for those that do not want to face high repair costs yourselves, but whether it’s the right fit for you depends on your budget and needs. If you’re unsure, get a quote and weigh up your options. The peace of mind that you have financial protection can be worth it.
Does Comprehensive Car Insurance cover engine failure?
No, comprehensive insurance doesn’t cover mechanical failures unless they result from an insured event like an accident, flood, or fire. Engine failure from wear and tear or internal faults is not covered.
What should I check before buying MBI?
Before getting a policy, check:
Make & model - Getting the make and model right.
Claim limits – Some policies cap payouts per claim.
Exclusions – Not all parts are covered (e.g., seals, gaskets).
Waiting period – Some policies require a stand-down period before claims.
Where can I buy Mechanical Breakdown Insurance?
MBI is mostly sold at car dealerships. However, you can now shop for Mechanical Breakdown Insurance online with Quashed.co.nz
This article by Quashed provides general information only. It does not constitute insurance or financial advice. For full details, refer to Quashed’s terms and conditions.
