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Here is a good post about GEICO MBI:
"So to piggy back on Jim.. I thought this deserves it's own thread. Well to sum this all up, On saturday I sell this guy a VSC, maint, RHT, and some accesories. When I was explaining it all to him on my menu he was exited to say yes to my package and take all this coverage. He plans on keeping this car until it dies so he felt it was a great investment. Happier than a pig in poop! Well, a few hours later I get the phone call.. "Geico is covering all of the same stuff you are but for only $8 a month instead of the $40/month i'm paying you, so I want to cancel!" Well I explained to him that there is no way in hell they're covering his rims and tires from road hazards, I also told him they're not covering his maintenance either. I told him what they have is called "Mechanical Breakdown Insurance". And i went into my long winded pitch on the differences. He came in again yesterday and I went through it all with him again. Well I got the road hazard to stick, but the VSC and Maint is now cancelled. So I decided to jump on here today and put together everything i've learned about MBI and how to try to outsell it.
First off, I've already started to wage a war against Geico, and I hope you all will join me, and educate all the FIM's we know. Geico, has a tendency to just pack in the MBI without letting the client know what it is, and since it's so cheap people rarely bother to remove it from their policy. This is my first step in the war. Since I do a lot of leases in my store.. every single ins. binder I see that has MBI on it, and the customer is leasing, I make sure to let the customer know what it is, and why they don't need it, and make a hint of geico trying to pull something funny hoping to get the client mad at geico. "There's no point in paying for insurance you're never going to use! Your lease is covered under full warranty unless you exceed 50,000 miles, what are they trying to pull over there??? they must think you're stupid!". I know i'd barely get to scrape the surface by doing this, but I hope all of you take the same or similar approach.
CONS OF MBI:
1) Paying for a product that you cannot use until your factory warranty is up
2) Insurance based products increase in price as risk gets higher
3) $250 deductible per claim
4) Change your insurance company and you forfeit what you've paid.
5) Not transferrable to the next owner
6) No refunds on premiums paid if your car is totalled or traded in
7) Insurance based products increase in price in conjuntion with a claim
8) Can be cancelled for excessive claims by Geico
9) Can be cancelled for ANY reason by Geico (Not a contract)
10) Claims may need to be authorized by an adjuster which may delay repairs (they said an adjuster usally will go out within 48 hours)
11) premiums can increase at ANY time due to losses paid by geico that you weren't involved in. Such as hurricane insurance in florida after the hurricanes a few years ago wiped out many insurance companies.
12) Since your deductible is so high, you may be paying for all or most of your own repair.
13) Since your deductible is so high, and you are unsure about what the repairs will actually cost, you may decide to have the car "checked out" first, as a quote before you claim. This wastes more of your valuable time.
14) Non-factory authorized repairs. I know on a daily basis, when we handle accident repairs with Geico and other insurance companies, they're always fighting us on our labor rates. They'd much rather you go through an independant repair facility than a factory authorized repair facility and will do their best to persuade someone not to use the dealership. This may result in non-factory approved parts, fluids, filters and techniques to be used in your vehicle. This may also cause more claims due to improper worksmanship, and more deductibles to pay.
15) Fluids are not covered in conjunction with a covered repair
edit:
16) only available on cars less than 15 mos old and fewer than 15,000 miles.
17) only available to the first title holder
That's all I can think of right now. And just to elaborate on their increase in premiums as the car gets older, here's is what they gave me over the phone for a 2008 Jetta. Keep in mind they said the VW was on the lower end of price increases compared to other brands, either way, the increases are still a lot and get to be more expensive than my VSC.
yrs 1-3 expect price increases of 1-2% per year
yr 4 is a 10% increase on previous year
yr 5 is a 50% increase on previous year
yr 6 is a 25% increase on previous year
yr 7+ is a 30% increase per year on previous year.
do the math! "
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