Mechanical Breakdown Insurance Updated: 01/19/2000

History - Founded in 1922.

Insurance rating - ‘A+’ A.M. Best.

Support - Specialized claims and policy services.

World class...

Partnership - Member of the Zurich Group since 1982

Products in the Market Place

• Manufacturer’s Warranty (3yr/36K)

• Mechanical Breakdown Insurance (MBI)– Rates are set & filed with the TDI!

• Vehicle service contract (VSC)– No Set Price!

New and Used Franchised

55%Used Independent

24%

Used Individual21%

Breakdown of Sales Volume

Source: Wall Street Journal 1/7/97.

Reasons to Sell MBI

• Agents receive 20% commission up to $160 per policy.

• Commission paid up front.

• Charge back only if policy is cancelled in first 12 months.

Payment Options

• Single premium.

• Financed in auto loan.

• 24 equal payments.

Eligibility• Customer must have liability, comprehensive

and collision coverage (with any carrier).

• The MBI policy must be purchased within 30 days of the vehicle purchase unless the vehicle has less than 36,000 miles and is still within the manufacturer’s basic warranty.

• Vehicle must have less than 75,000 miles and be a 1993 or newer.

Eligibility cont.

“NEW”

(New ----------> 3yr/36K)

MBI can be purchased anytime!

“USED”

(3yr/36K ----->93/75K)

MBI can only be purchased within 30

days of vehicle purchase!

Terms

– 6 years/100,000 miles– 6 years/60,000 miles– 5 years/75,000 miles– 4 years/60,000 miles– 3 years/45,000 miles– 2 years/30,000 miles

Terms begin on the policy date of sale. Mileage is in addition to the current odometer reading.

Coverage Options

• Preferred (Named Parts)– Engine, Transmission, Drive Axle, AC/Heating, Electrical, Suspension, Brakes, Interior/Exterior, & Steering.

• Comprehensive (All Risk)– Provides coverage for all mechanical failures except those specifically excluded.

Automatically Included • Rental car provision for breakdowns ($25

per day based upon repair-6 day max)

• First day rental

• Trip interruption feature will reimburse you for food and lodging when you are 100 miles from home (three day max @ $100 per day)

• Towing reimbursement up to $35.00

Claim Features and Benefits • Repairs can made at any repair facility that

warrants their work unless still within manufacturer’s warranty.

• Retail parts reimbursement.

• Posted Labor Rate.

• Three payment options: - Direct payment to repair facility. - Credit card payment to repair facility. - Customer reimbursement.

Farmers MBI is like no other• Coverage is transferable when the vehicle is

sold adding resale value.

• Farmers MBI provides up to $100 per day for trip interruption expenses.

• Only one deductible per visit regardless of the number of covered parts being repaired.

• No pre-purchase mechanical inspection.

• Vehicle may be taken to any repair facility.

• Expiration calculated by adding time/miles.

The Competition • Are failures that are the result of normal

wear and tear covered on all named components?

• Where can the vehicle be repaired?

• Is the price negotiable?

• Is rental car coverage available if the vehicle is only in the shop for a fifteen minute repair?

Now you know what Farmers MBI is, how do you introduce it

to your customers??

How to bring up MBI to your customers on car change calls?

• Do you want the insurance only coverage or our new FULL coverage?

• Did you buy life and health insurance for your CAR?

• What is the mileage on this car as you may be eligible for our special mechanical coverage too?

• What kind of mechanical warranty did you purchase on your car?

Marketing Ideas • Target car changes

• Target existing customers within months 20 to 35.

• Offer MBI on Auto Quotes

• Fame & Client Vision Mailings

• Dept. of Motor Vehicle lists

• Posters & Stuffers

• Child ID Booths

• Desktop Laminate - JUST ASK!

AGENT HELPLINE

888/236-3099