Will a Typical Car Insurance Policy Cover Engine Failure?

Auto insurance policies typically only cover accident-related repairs. Your policy likely won’t cover engine failure or other malfunctions except if you have mechanical breakdown insurance coverage or if the engine failure was caused by a covered accident. However, the manufacturer’s warranty may cover engine damage. Read on for more detailed information on this topic.

Types of Auto Policies

The four main types of auto insurance policies are:

  • Collision – Pays for car repairs if you collide with another vehicle or object, regardless of who is responsible for the accident.
  • Comprehensive – Pays for repairs if your vehicle is damaged due to non-collision-related events, like a house fire or a flood.
  • Property damage liability coverage – The at-fault driver’s property damage liability coverage pays for car repairs in the event of an accident.
  • Uninsured motorist: Pays for car repair if you’re in an accident and the at-fault driver is uninsured.

It’s important to note that all the above policies only cover damage caused by external factors, meaning they don’t cover normal wear and tear. If you can’t demonstrate that engine failure emanates from a covered accident, your insurer likely won’t foot your repair bills. Moreover, uninsured motorist, comprehensive, and collision policies are optional in 28 states, and so you may not have them if you only have the legal minimum insurance. Other policies, such as liability coverage and personal injury protection, have nothing to do with car repair, and therefore, don’t cover mechanical failure.

Does Gap Insurance Pay for Mechanical Breakdown?

Guaranteed auto protection (GAP) insurance typically doesn’t cover mechanical issues such as a broken transmission or a seized engine. Gap insurance covers the difference (gap) between what you owe for your vehicle and the vehicle’s value. It is reasonable to assume that your gap insurance will cover you if your car engine blows up, especially if the repair cost is more than your vehicle’s value. Nonetheless, gap insurance kicks in due to specific incidents, like an accident. It won’t compensate you if your engine breaks down, regardless of the severity of the problem.

Your Warranty or MBI Coverage Can Pay for Breakdowns

There are two kinds of coverage that can pay for repairs even if the engine failure doesn’t result from a covered accident. However, they’re not included in the standard auto insurance policies.

The first one is the manufacturer’s warranty. This typically covers replacement parts and repairs over a specified period or miles driven. The two common types of manufacturer’s warranties include bumper-to-bumper warranty and powertrain warranty. The former covers the entire vehicle, while the latter only covers the components of the powertrain (engine, transmission, and the drivetrain). The second type of coverage that can cover repairs after engine failure is mechanical breakdown coverage/MBI. MBI is similar to an extended car warranty in that it covers all kinds of breakdowns, including engine failure.

How to Choose Between Extended Warranty and Mechanical Breakdown Insurance

While mechanical breakdown insurance and extended warranty share similarities, each has its pros and cons. For instance, MBI’s monthly payments are lower, and it offers more flexible coverage. However, extended warranties are available for a wider range of vehicles. MBI policy allows you to choose your mechanic and pay in installments. However, it often doesn’t cover high-end cars and charges higher deductibles.  Conversely, with an extended warranty, you are usually required to use a dealer-approved mechanic and pay upfront, but the deductible is lower.

How to Get the Right Auto Insurance Coverage

For auto insurance that adequately covers your vehicle, contact us at Spotlight Insurance Agency today. Our experts will help you find a policy that suits your needs and budget.