Does Car Insurance Cover Engine Failure?

In general, no. A typical car insurance policy only covers vehicle repairs if they are the result of an accident.

If your engine simply has a mechanical failure or other malfunction, you are unlikely to be covered.

The following are the only exceptions:

• If you have specialized mechanical breakdown insurance.
• The issue can be traced back to a recent accident.
• The damage is covered by your vehicle's warranty.

Typical car insurance only covers damage after an incident

In most cases, car insurance — even full coverage — will not cover the repair of your vehicle if it is simply due to mechanical breakdown or wear and tear.

There are four common types of insurance coverage that pay for car repairs, but none of them cover mechanical issues.

What they do cover is as follows:

• Collision: Covers the cost of repairing your car after a collision, 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 coverage for property damage: Pays for car repairs if you are at fault in a collision (if the other driver was at fault, their coverage would pay to repair your car)
• Uninsured motorist: Pays for car repairs after a collision if the at-fault driver did not have insurance.

They all have one thing in common: they only apply if your car was damaged due to an external cause; none of them cover engine damage caused by normal wear and tear.

• If you're having engine trouble and can prove that a crash or other specific incident caused the problem, you should be able to get the damage repaired through your insurance. Otherwise, you'll be on the hook for the bill.

Furthermore, collision, comprehensive, and uninsured motorist coverage (in 28 states) are optional auto insurance coverages, which means you won't have them if you choose the legal minimum level of insurance.

Other coverages, such as personal injury protection (PIP) and bodily injury liability coverage, have nothing to do with your car's repair and will never pay for mechanical failure.

Does gap insurance pay in case of mechanical breakdown?

The short answer is that gap insurance does not cover mechanical breakdowns such as a seized engine or a 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 assume that you'll be able to use your gap coverage in the event of a blown engine or other total breakdown, especially if a significant repair costs more than the value of your car.

However, gap insurance only applies if the damage is the result of a specific incident, such as a collision. You will not be able to file a claim if your car engine simply fails, regardless of how serious the problem is.

Your warranty or MBI coverage can pay for breakdowns

There are two types of coverage under which you can file a claim for car repairs, even if the repairs aren't required as a result of a collision or other damage; however, neither is included in a typical auto insurance policy.

The first isn't insurance at all; it's the warranty on your car. If your vehicle is relatively new (around 3-6 years old or newer), you are likely to have a warranty that covers mechanical repairs for a set period of time or distance driven. If you purchased an extended warranty, you are more likely to be covered for a blown engine.

Many vehicle warranties are divided into two parts:

• The bumper-to-bumper warranty covers every component of your vehicle.
• The powertrain warranty, which only covers the moving parts of your vehicle.

If you have a separate powertrain warranty, it will be longer than your bumper-to-bumper coverage. It will include the engine, transmission, gears, and axles of your vehicle.

The second type of coverage is mechanical breakdown coverage, also known as MBI or mechanical failure insurance, and it may cover the cost of repairing an engine failure or any other mechanical problem.

MBI works similarly to an extended warranty in that it covers any type of breakdown, such as a blown motor or a transmission problem. However, unlike an extended warranty, MBI is purchased from an insurance company.

How to choose between extended warranty and mechanical breakdown insurance

If you're worried about a seized engine or other mechanical failure and are considering extended warranty or MBI coverage, it can be difficult to determine which is best for you. They are similar, but each has advantages. For example, mechanical breakdown insurance is less expensive per month and offers more flexibility in terms of mechanics. However, extended warranties are available for a wider range of vehicles.

Pros and cons of extended warranty and mechanical breakdown insurance