Why Standard Car Insurance Doesn't Cover Engine Failure
Car insurance is designed to cover sudden, unexpected events—not normal wear and tear or mechanical failure. The three main types of coverage—liability, collision, and comprehensive—are structured around this principle.
Liability insurance: Covers damage you cause to others. It doesn't cover your own car at all.
Collision insurance: Covers damage to your car from crashes with other vehicles or objects. It doesn't cover mechanical failure unless the engine was damaged in a collision.
Comprehensive insurance: Covers damage from theft, vandalism, weather, fire, and falling objects. It doesn't cover mechanical failure or normal engine wear.
Engine failure caused by age, lack of maintenance, or normal wear is considered a maintenance issue, not an insurable risk. Car insurance isn't a maintenance plan or warranty—it's protection against unexpected external events.
Think of car insurance like homeowners insurance. It covers fire, theft, and storm damage—but not a broken furnace or leaky faucet. Those are maintenance issues. Engine failure is the car equivalent.
When Car Insurance DOES Cover Engine Damage
Although standard car insurance doesn't cover normal engine failure, there are scenarios where engine damage is covered:
Collision damage: If you're in an accident and the collision damages your engine, collision coverage pays for repairs. Example: You hit another car and the impact damages your engine block or radiator.
Flood or water damage: If your engine is damaged by flooding, comprehensive coverage pays for repairs or replacement. Example: Your car is caught in a flood and water enters the engine, causing hydro-lock.
Fire damage: If your engine is damaged or destroyed by fire, comprehensive coverage applies. Example: An electrical fire spreads to the engine compartment.
Vandalism: If someone deliberately damages your engine (pouring sugar in the gas tank, cutting wires, etc.), comprehensive coverage pays for repairs.
If you attempt to start a flooded engine and cause additional damage, your insurer may deny the claim for negligence. Never start a car that's been submerged or exposed to deep water.
What Is Mechanical Breakdown Insurance (MBI)?
If you want protection against engine failure and other mechanical problems, mechanical breakdown insurance (MBI) is an optional coverage you can add to your auto policy.
What MBI covers: Engine failure and internal damage, transmission and drivetrain repairs, electrical and computer system failures, steering and suspension, air conditioning and heating systems, and more.
What MBI does NOT cover: Normal wear items (brake pads, tires, belts, hoses), routine maintenance (oil changes, fluid flushes), damage from neglect or lack of maintenance, pre-existing conditions.
How it works: If a covered component fails, you pay a deductible (typically $100–$250) and the insurer pays the rest. You can use any licensed repair shop.
Cost: MBI typically costs $30–$100/year when added to an auto insurance policy—significantly cheaper than dealer-sold extended warranties, which can cost $1,500–$3,000.
MBI is different from an extended warranty. MBI is sold by insurance companies and added to your auto policy. Extended warranties are sold by dealers or third parties. MBI is often cheaper and more flexible.
MBI vs. Extended Warranty: Which Is Better?
If you want protection after your manufacturer's warranty expires, you have two main options: mechanical breakdown insurance or an extended warranty.
Mechanical Breakdown Insurance (MBI): Pros: Cheaper ($30–$100/year), added to your auto policy (one bill), flexible repair shop choice. Cons: Must be purchased while the car is relatively new (typically under 15,000 miles or 15 months old), not transferable if you sell the car.
Extended Warranty: Pros: Can be purchased at any time (even for older cars), transferable to new owner (can increase resale value). Cons: Expensive ($1,500–$3,000 upfront or $50–$100/month), often limited to specific repair shops, may have coverage exclusions.
Which is better? MBI is generally the better value if your car qualifies (new or nearly new). It's cheaper, more flexible, and provides similar coverage. Extended warranties make sense for older cars that no longer qualify for MBI.
Which Insurers Offer Mechanical Breakdown Insurance?
Not all car insurance companies offer MBI. Here are some major insurers that do:
- Geico (MBI available in most states)
- Progressive (available in most states)
- Allstate (available in select states)
- American Family (available in select states)
- National General (available in select states)
Availability and coverage details vary by state and insurer. Contact your insurance company to ask if MBI is available and what it covers.
Other Ways to Protect Against Engine Failure
If MBI isn't available or doesn't fit your budget, here are other options:
Manufacturer's warranty: New cars come with a factory warranty (typically 3 years/36,000 miles bumper-to-bumper, plus 5 years/60,000 miles powertrain). Keep up with maintenance to avoid voiding the warranty.
Extended warranty (third-party): Purchase from a reputable provider like CarShield, Endurance, or CARCHEX. Read the fine print carefully—coverage varies widely.
Emergency fund: Set aside $1,000–$3,000 for unexpected car repairs. This is often more cost-effective than paying for extended coverage you may never use.
Preventive maintenance: Follow the manufacturer's maintenance schedule. Regular oil changes, fluid checks, and inspections can prevent many engine failures.
The best way to avoid engine failure is preventive maintenance. Skipping oil changes or ignoring warning lights can lead to catastrophic damage that no policy will cover.
What to Do If Your Engine Fails
If your engine fails, here's what to do:
1. Check your warranty status. If your car is still under the manufacturer's warranty, repairs may be covered at no cost (minus any deductible).
2. Check for recalls. Some engine failures are caused by manufacturer defects. Visit the NHTSA website or call your dealer to see if your car has an open recall.
3. Review your MBI or extended warranty. If you have mechanical breakdown insurance or an extended warranty, file a claim immediately.
4. Get a diagnosis and estimate. Take your car to a trusted mechanic or dealer for a full diagnosis. Get a written estimate for repairs.
5. Evaluate repair vs. replacement. If repair costs exceed the car's value, it may be more cost-effective to sell or trade in the car and buy a replacement.
Frequently Asked Questions
No, standard car insurance does not cover engine failure caused by normal wear and tear or mechanical breakdown. Car insurance covers damage from accidents, theft, and weather—not routine maintenance or mechanical failure.
Car insurance covers engine damage only if it's caused by a covered peril: collision damage from an accident, flood or water damage (comprehensive), fire (comprehensive), or vandalism (comprehensive). Normal engine failure from wear and tear is not covered.
MBI is an optional coverage that pays for engine and mechanical repairs after the manufacturer's warranty expires. It covers engine failure, transmission, electrical systems, and more. It's similar to an extended warranty but purchased through your insurer and typically cheaper.
It depends on your car's age, reliability, and repair costs. MBI is often cheaper than dealer-sold extended warranties and provides similar coverage. It's most valuable for cars aged 3–10 years with expired factory warranties. For highly reliable cars, it may not be worth the cost.
No. Comprehensive covers damage from theft, vandalism, weather, fire, and animals—but not mechanical failure or wear and tear. Engine failure from normal use is not a covered peril under comprehensive.
Check if your manufacturer's warranty is still active. If not, check for recalls on the NHTSA website. Review your MBI or extended warranty coverage if you have it. Get a diagnosis and estimate from a mechanic. If repair costs exceed the car's value, consider replacing the vehicle.