What differentiates Car Insurance from Mechanical Breakdown Insurance? 

You’re out on the road in your vehicle, when suddenly your engine starts making an ominous sound. Already you are dreading the repair bill. But you then remember you've got comprehensive Full Cover car insurance, so you're covered... right?

Not quite. This is where many New Zealand drivers get caught out, discovering too late that their car insurance won't help with mechanical failures.

Let's clear up the confusion between Mechanical Breakdown Insurance (MBI) and comprehensive Full Cover car insurance.

What is comprehensive Full Cover car insurance?

Comprehensive Full Cover car insurance is the most extensive cover available 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 Full Cover 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.

See Assurant’s Full Cover car insurance policy wording for full details of the policy coverage.

What comprehensive Full Cover car 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 Full Cover car insurance doesn’t cover mechanical failures, you can protect yourself further with 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 Full Cover car insurance does not. One of the biggest reasons drivers consider MBI is the high cost of mechanical repairs.

Assurant’s MBI products are designed to help with the cost of repairs, including labour and replacement parts. Our average repair cost is $1,600 and this is going up every year due to inflation and increasingly complex technology in cars. And when you consider that modern vehicles contain thousands of components, any of which might fail over time, the impact on your pocket could be painful.

What Mechanical Breakdown Insurance typically covers:

Assurant's MBI packages cover most major mechanical, electrical, and electronic components, including labour. You can choose from our Optimum, Maxi and Kinetic polices. Each has a different set of qualification requirements and provide varying level of coverage.

You can check out more information about Assurant's MBI products here.

What Mechanical Breakdown Insurance typically does not cover:

Items not covered include issues arising with the battery, exhaust system, wheels & tyres, cosmetic items, glass, struts, shock absorbers, seat mechanisms, brake shoe linings, disc pads and rotors, clutches and flywheel assemblies due to wear & tear.

Please note that any repairs commenced or carried out without prior Assurant approval will not be covered.

For a full list of exclusions please refer to the policy wordings below:

So whilst comprehensive Full Cover 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.

Should I buy both MBI and car insurance? 

You can think of MBI and comprehensive Full Cover car insurance as complementary rather than competing protection products. MBI guards against internal failures whilst comprehensive Full Cover car insurance protects your car from external threats.

Currently Assurant MBI products can only be purchased at the time of vehicle sale when purchased from an Assurant approved Dealership. Your dealer will discuss the best option for your new vehicle. Not all cover types are available at every dealership. You can check out more about Assurant's MBI products here.

For more information on Assurant car insurance products or to buy a new Assurant car insurance policy, then you can find more information here.  

If you have any further questions, then please don't hesitate to reach out to our Customer Services team on 0800 776 832.