Which of the following is an exclusion under physical damage coverage?

Mechanical failure is indeed an exclusion under physical damage coverage because this type of insurance specifically covers loss due to accidents, collisions, theft, vandalism, and certain natural disasters. Physical damage coverage is designed to protect vehicles from unforeseen events that cause damage and does not include routine maintenance issues or mechanical breakdowns that occur due to wear and tear or lack of proper upkeep. Thus, if a vehicle experiences a mechanical failure, the costs incurred for repairs are not covered by physical damage insurance policies.

On the other hand, theft by strangers, vandalism, and natural disasters would typically be covered under physical damage coverage, as these represent external and unexpected events that can result in damage to the vehicle.