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How Mechanical Breakdown Insurance in California Differs from Standard Car Warranties

POR: David Goldberg
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There are many reasons to own a car in California: a lifestyle expression, an investment, and, ultimately, a means of transportation. Protecting a vehicle from breakdowns and surprise repair bills ensures owners in the Golden State that these purposes continue smoothly. All new cars and some newer used cars come with a factory warranty.

However, this coverage doesn’t last forever. That’s where an extended warranty comes into play – only things are handled differently in California. In this state, vehicle owners who prefer not to hassle with a car dealer can purchase protection known as seguro averia mecanica (MBI). MBI, similar to an extended warranty, has particular requirements and considerations in California.

Keep reading as we dive into the world of mechanical breakdown coverage. You’ll be able to learn more about MBI and how it compares to other protections, like a standard or extended car warranty.

Overview of Mechanical Breakdown Insurance in California

While seguro averia mecanica can be bought in any state (usually as a supplement to an existing car insurance policy), MBI has a unique meaning in California. We’ll get into those specifics momentarily.

In broad terms, MBI protects a car’s vital mechanical systems (such as the engine and transmission) against breakdowns due to a defective component or poor workmanship. Depending on the plan, coverage can extend into the electrical system, air conditioning, suspension, and other vital areas.

Importantly, MBI does not include a traditional auto insurance policy (like liability, collision, or comprehensive). In addition, seguro averia mecanica coverage doesn’t usually pay for routine maintenance, like cambios de aceite and replacing brake pads.

You’re right if you think this coverage sounds like an extended warranty (also called a vehicle service contract or auto protection plan) – it is similar to MBI. However, this is where the California specifics kick in. State law prohibits anyone other than a licensed car dealership from selling an extended warranty in California. If you want protection for a car in California that’s losing (or has lost) its manufacturer warranty coverage, you must buy MBI.

However, you can’t just go anywhere to buy mechanical breakdown coverage. MBI has to be purchased from a California-licensed insurance company. Such businesses are regulated by the California Department of Insurance (CDI).

To sell MBI policies legally in the state, a company must be worth at least $100 million or obtain supplemental insurance to ensure claims can be paid. The CDI must also review and approve MBI policies and rates before consumer sales can begin. For instance, Endurance is licensed as an insurance company in California, ensuring customers they’re dealing with a legitimate operation.

Standard Car Warranties and Extended Warranties Explained

Consumers buying a new car from a mainstream brand like Vado o toyota receive manufacturer’s coverage (often called a bumper-to-bumper warranty) that’s good for three years or 36,000 miles. Some automakers extend this coverage; four years or 50,000 miles is typical. In addition, some car makers may include a powertrain warranty that safeguards the engine, transmission, and drive axles. This type of car protection usually lasts five years or 60,000 miles.

The original warranty (bumper-to-bumper or powertrain) may also be applicable when buying a newer used car. However, factory coverage may not always transfer to a subsequent owner. For instance, hyundai y kia tout their ten-year/100,000 powertrain warranty, but this protection only applies to the original owner.

The mileage terms for all these warranties may seem generous, but it’s not unusual for an owner to max out their car’s coverage due to miles, not time. The Federal Highway Administration reports that the typical American drives 13,476 miles annually. Based on this average, a 36-month/36,000-mile warranty would end in 32 months. It’s worse for certain driver groups. The federal government says males aged 35-54 drive an average of 18,858 miles yearly. Such usage cuts 36 months of coverage to less than 23 months.

Why does this matter? Because car owners get used to the peace of mind of being protected against surprise repair bills. Enter extended warranties.

Whether an owner is dealing with expiring (or expired) factory coverage or a recently purchased car with no protection, an extended warranty can step in. Coverage varies by warranty company, but here’s an overview of the primary plan types:

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A powertrain extended warranty is usually the least expensive coverage option. It falls under the stated component classification that details precisely what parts are protected and under what conditions. The warranty company won’t pay for a replacement or related work if a part isn’t mentioned in the service contract.

Powertrain components include the engine, transmission, and drive axle, but specific subcomponents may or may not be covered. In addition, a powertrain plan often covers parts for an all-wheel-drive or four-wheel-drive vehicle (such as a transfer case and an additional drive axle and differential). Budget-minded car owners often get powertrain protection because it balances affordability and coverage well (engine and transmission work is often the most expensive).

Stated Component Warranty

Think of stated coverage as an expansion of powertrain protection. In addition to safeguards for the engine, transmission, and drive axle, these plans cover additional systems like air conditioning, suspension, steering, brakes, and electrical. Coverage areas are spelled out in the contract but can vary by plan and company. Like with a powertrain extended warranty, anything not specified in writing falls outside the bounds of the agreement. Because of the extra protections, costs increase for a stated component extended warranty.

Exclusionary Warranty

An exclusionary plan is the highest-level extended warranty and is closest to a new car warranty. Rather than listing the thousands of covered components (which would make for a very long service contract), exclusionary coverage lists what’s not protected. Because of the comprehensive nature of the safeguards, an exclusionary plan is the most expensive type of extended warranty. Costs can be offset by choosing a higher deductible or shorter term.

Key Differences Between MBI and Standard Car Warranties

Overall, MBI and standard warranties (including factory and extended coverage) are similar. They offer protection against failed components, breakdowns, and surprise repair bills. However, because of the regulatory oversight of MBI in California, coverage looks a little different.

For example, vehicle qualification standards vary from an extended warranty in another state. Here’s the breakdown for Endurance’s California MBI offerings.

New Used
Qualification Less than four years old and under 50,000 miles Up to ten years old and more than 50,000 miles
Effective Date Right away 30-day/1,000-mile waiting period
Expiration Time- or mileage-based term or 150,000 miles Time- or mileage-based term or 150,000 miles
Term Options 4 years/40,000 miles through 6 years/90,000 miles 3 years/30,000 miles through 4 years/60,000 miles
Deductible Options $0, $50, $100, or $200 $0, $50, $100, or $200

Further, Endurance MBI coverage is similar to its extended warranties, but the main plans are bundled differently.

Standard Plan: Stated Component Coverage

The Standard MBI policy covers the most vital mechanical components. This allows for budget-friendly protection against potentially costly vehicle repairs to the engine, transmission, and drive system.

Premium Plan:  Comprehensive Coverage

The Premium tier provides more protection than the Standard option. In addition to crucial powertrain coverage, the policy safeguards vital secondary areas like the electric system,  steering, fuel system, air conditioning, and premium electronics.

Elite Plus Plan: Exclusionary Coverage

The Elite Plus plan is the most all-encompassing, full coverage MBI plan available. This policy follows an exclusionary framework incorporating a select list of non-covered components. It offers the ultimate peace of mind because it comes closest to an original bumper-to-bumper warranty. If something goes wrong, there’s no worry about what is or isn’t covered. The few exclusions are spelled out in the service contract.

Legal Requirements and Consumer Benefits

The tight regulation of MBI policies in California translates into extra assurance and confidence for consumers. Of course, every contract has its fine print, but thorough government scrutiny ensures no “gotchas” amid the terms and conditions. Further, tight controls ensure that MBI providers are committed to sound business practices and fair treatment of their customers.

Here’s an overview of how MBI customers are protected in California (adapted from California Business and Professions Code Section 17500 and Insurance Code Sections 116.6 and 1794.41-43).

California Law Prohibits Deceptive Business Practices

California has a law banning unfair, misleading, or dishonest business actions. The state insurance department uses this law to crack down on MBI companies who exaggerate or fail to explain their services, disclaimers, or policy details clearly.

Mechanical Breakdown Insurance Has Special Rules

California laws specifically define mechanical breakdown insurance as a “vehicle protection product” – a type of coverage for car warranty repairs. MBI policies even have rules on how large the text must be.

MBI Contracts Must Be Clear and Flexible

Some key parts of California MBI rules state:

  • All MBI agreements must be straightforward and understandable. They must include the seller’s contact info, the coverage length, and any upfront deductible.
  • Customers have a right to review the contract before signing. Companies must also send a copy of the finalized policy within 60 days of purchase.
  • Drivers can cancel their MBI plan within 60 days if they haven’t filed any claims yet.

How Endurance Warranty Complements MBI in California

Just because all California MBI providers have to meet the same requirements doesn’t mean every company is the same. Endurance stands apart because of the following:

  1. A strong history of serving customers: Since 2012, Endurance has paid hundreds of millions in claims nationwide.
  2. Being a direct policy administrator: Endurance doesn’t use third parties for claims processing, ensuring an efficient customer experience.
  3. Providing personalized customer service: Endurance’s team of experienced professionals is ready to help support policyholders with coverage questions, claims processing, and account servicing.

Mechanical Breakdown Insurance Is Worth It

Hitting the freeways can be less stressful with the protection of Endurance seguro averia mecanica policy. It’s the best way to safeguard against unexpected repairs and the high cost that comes with mechanical failures. Endurance MBI plans feature flexible payment options and coverage for most cars and budgets. There are other benefits, like the freedom to select any Mecánico certificado ASE or repair shop for covered repairs and 24/7 roadside assistance (with towing coverage and lockout assistance).

Discover the best MBI policy for your needs by requesting a FREE online quote or visiting our tienda en línea. Need personalized help? Call (800) 253-8203 to speak with an Endurance advisor.

Revisar la Blog Endurance for helpful articles about provider comparisons with Progressive and Geico mechanical breakdown insurance, auto warranty providers like CARCHEX y CarShield, expert car care, safety tips, make and model reviews, and more.

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