Does Car Insurance Cover Engine Failure?
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Generally, no. A typical car insurance policy only covers repairs if they're related to an accident.
You likely won't be covered if your engine simply has a mechanical failure or other malfunction.
The only exceptions are:
- You have special mechanical breakdown insurance coverage.
- You can trace the problem back to a recent accident.
- The damage is covered under your car's warranty.
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Typical car insurance only covers damage after an incident
In most cases, car insurance — even full coverage — won't cover car repairs due to mechanical breakdown or wear and tear.
There are four common types of coverage that pay for the repair of your car, and none pay for mechanical problems, unfortunately.
Here's what they do cover:
- Collision: Pays to repair your car after a crash, regardless of who was at fault
- Comprehensive: Pays to repair car damage that's not related to a car accident, such as falling rocks or a house fire
- Liability coverage: Pays to repair your car when you are at fault for a crash (if the other driver was at fault, their coverage would pay to repair your car)
- Uninsured motorist: Pays for repairs to your car after a crash if the at-fault driver doesn'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're having trouble with your car's engine and can demonstrate that a crash or other specific incident was the cause, you can likely get the damage repaired under your insurance. Otherwise, you'll be responsible for the bill yourself.
Also, collision, comprehensive and uninsured motorist (in 28 states) are optional auto insurance coverages, so it's unlikely you have them if you opted for the legal minimum level of insurance.
Other insurance, such as personal injury protection (PIP) and liability coverage for bodily injury, don't relate to your car at all and will never pay for mechanical failure.
Does gap insurance pay in cases 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, especially if a repair costs more than your car's value.
However, gap insurance only goes into effect if the damage is due to a specific incident, such as a crash. You won't be able to make a claim if your car engine simply breaks down, no matter how serious the problem.
Your warranty or mechanical breakdown coverage can pay for breakdowns
There are two types of coverage for repairs to your car, even if it isn't the result of a crash or other damage. However, neither is included in a typical auto insurance policy.
The first isn't insurance at all but your car's warranty. If your vehicle is relatively new (around 3–6 years old or newer), you likely have a warranty that pays for mechanical issues for a certain amount of time or distance driven. If you opted for an extended warranty, you're likely covered for a blown engine.
Many vehicle warranties have two parts:
- The bumper-to-bumper warranty, which includes every part of your vehicle
- The power train warranty, which only covers the parts that make your car move
Your power train warranty is longer than your bumper-to-bumper coverage and includes the engine, transmission, gears and axles.
The second is related and may cover the cost to repair engine failure or any other mechanical problem: mechanical breakdown coverage, also called MBI or mechanical failure insurance.
MBI functions very similarly to an extended warranty. It covers any kind of breakdown, such as a blown motor or a transmission problem. But, unlike an extended warranty, you purchase MBI from an insurance company.
How to choose between an extended warranty and MBI
If you're concerned about a seized engine or other mechanical failure and are considering an extended warranty or MBI, it can be hard to decide which one is right for you. They're similar, but each has advantages. For example, mechanical breakdown insurance is cheaper and provides more flexibility when it comes to mechanics. But an extended warranty is available for a broader range of vehicles.
Pros and cons of an extended warranty and mechanical breakdown insurance
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