Does Car Insurance Cover Engine Failure?

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A typical car insurance policy only covers repairs to your vehicle if they're related to some kind of accident. As a result, you likely won't be covered if your engine simply has a mechanical failure or other malfunction. The only exceptions are if you have special mechanical breakdown insurance coverage, you can trace the problem back to a recent accident or the damage is covered under your car's warranty.

Typical Car Insurance Only Covers Damage After an Incident

In most cases, car insurance—even full coverage—won't cover your car's repair if it's just due to mechanical breakdown or wear and tear. There are four common types of insurance coverage that pay for repair of your car, and none of them will pay for mechanical problems: collision, comprehensive, liability and uninsured motorist.

  • Collision: Pays to repair your car in a crash, regardless of who was at fault
  • Comprehensive: Pays to repair your car from damage not related to a collision, such as falling rocks or a house fire
  • Liability—Property Damage: Pays to repair your car when you are at fault in a crash (if the other driver was at fault, their coverage would pay to repair your car)
  • Uninsured Motorist: Pays for repair to your car after a crash if the at-fault driver didn't have insurance

One thing they all have in common is that they only go into effect if your car was damaged due to an external cause—none of them cover engine damage due to normal wear and tear. If you can demonstrate that a crash or other specific incident was the cause of the problem, you are likely to be able to get the damage repaired under your insurance. Otherwise, you'll be responsible for the bill yourself. Additionally, collision, comprehensive and uninsured motorist (in 28 states) coverages are optional auto insurance coverages, meaning you likely won't have them if you opted for the legal minimum level of insurance.

Other coverages, like PIP and liability (bodily injury) coverage, don't relate to your car's repair at all, and so will never pay for mechanical failure.

Does Gap Insurance Pay in Case of Mechanical Breakdown?

The short answer is no, gap insurance does not pay for a mechanical breakdown like a seized engine or broken transmission.

Gap insurance pays the difference between your car's value and what you owe on it if the vehicle is totaled in a crash or stolen. It's reasonable to conclude that you might be able to make a claim to your gap coverage in cases of a blown engine or other total breakdown. After all, gap coverage applies when the cost to repair your car is the same or more than what it's worth. And it's very possible for a significant repair to your engine, like a seized or hydrolocked engine, to exceed the total cost of your car. This is especially likely if your vehicle is older and has decreased in value since you bought it.

However, gap insurance only goes into effect if the damage is due to a specific incident, like a crash. You won't be able to make a claim if your car engine simply breaks down, no matter how serious the problem is.

Some Coverages Can Pay for Engine Breakdowns

There are two types of coverage under which you can make a claim to repair to your car, even if the repair isn't required as a result of a crash or other damage; however, neither is included as part of a typical auto insurance policy.

The first isn't insurance at all—it's your car's warranty. If your vehicle is relatively new (approximately 3–6 years old or newer), you are likely to have a warranty that pays for repair of mechanical issues for a certain amount of time or distance driven. If you opted for an extended warranty, you're especially likely to be covered for a blown engine. One thing to keep in mind is that many vehicle warranties have two parts:

  • The bumper-to-bumper warranty, which includes every part of your vehicle
  • The powertrain warranty, which only covers the parts that make your car move

If your powertrain warranty is broken out separately, it'll be longer than your bumper-to-bumper coverage. It'll include your car's engine, transmission, gears and axles.

The second is a related type of coverage that may cover the cost to repair engine failure or any other mechanical problem: mechanical breakdown coverage, also called MBI or mechanical failure insurance. It functions very similarly to an extended warranty in that it covers any kind of breakdown, such as a blown motor or a problem with your transmission. But unlike an extended warranty, you purchase MBI from an insurance company—GEICO offers it, for example, though not all insurers do.

How to Choose Between Extended Warranty and Mechanical Breakdown Insurance

If you're concerned about a seized engine or other mechanical failure and are considering extended warranty or MBI coverage, it can be hard to decide which one is right for you. They're similar, but there are advantages to each. For example, mechanical breakdown insurance is cheaper per month and provides more flexibility when it comes to mechanics. But an extended warranty is available for a broader range of vehicle.

Pros and Cons of Extended Warranty and Mechanical Breakdown Insurance

Extended WarrantyMechanical Breakdown Insurance
  • Higher cost of coverage
  • Lower deductible
  • Paid up-front
  • Cheaper coverage
  • Higher deductible
  • Paid in installments
Availability among car models
  • Available for most types of car
  • May not be available for high-end vehicles
  • Usually must use dealer-preferred mechanic
  • You choose the mechanic
Breadth of coverage
  • Includes minor repairs
  • Generally doesn't include minor repairs

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