Does Car Insurance Cover Engine Failure?

Learn about whether your car insurance covers engine failure and what your other options may be with Savvy today.

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, updated on February 15th, 2024       

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Car Insurance Banner - Two worried women examining the engine of their car after it has broken down on the road.

Engine failure can be a costly and unexpected event that leaves drivers worried about repair expenses. While car insurance generally doesn't offer cover in this area, it's important to understand what your coverage areas are if your car breaks down.

In Savvy’s informative guide, you can explore the ins and outs of engine failure in Australia and what your coverage options may be if it happens to you. Learn about some of the steps you can take if your vehicle suffers engine failure through us today.

Does car insurance cover engine failure in Australia?

Standard car insurance policies, whether comprehensive or third party coverage, generally don’t include protection for engine failure caused by normal wear and tear or mechanical breakdown. These instances aren’t considered claimable events under most policies.

However, if the engine failure is a result of an insured event, such as an accident, fire, or theft, your comprehensive car insurance may cover the repair or replacement of the engine.

What is considered engine failure in car insurance policies?

Engine failure in car insurance policies refers to the malfunction or breakdown of the engine, resulting in its inability to operate properly. This may come in the form of a flat battery, faulty brakes or certain other incidents. It can be caused by a range of factors and can lead to significant repair costs, as the engine may require repair or replacement.

Is engine failure covered under the manufacturer's warranty?

Manufacturer's warranties generally cover engine failure for a specific period or distance driven, typically during the early years of vehicle ownership. These warranties are provided by the vehicle manufacturer and are separate from car insurance policies. The coverage under a manufacturer's warranty can vary depending on the terms and conditions set by the manufacturer.

It's important to note that manufacturer's warranties have limitations and may not cover engine failure caused by neglect, improper maintenance or wear and tear. Once the manufacturer's warranty expires, you won’t be covered if your car experiences a mechanical breakdown which would’ve otherwise been included.

Are engine repairs covered under roadside assistance programs?

Engine repairs can also be conducted by roadside assistance on your car insurance. These programs typically provide services such as emergency fuel delivery, battery jump-starts, flat tyre changes and towing to a nearby repair facility. They’re designed to assist with immediate breakdowns and get your vehicle back on the road, but they don’t typically cover the cost of major repairs.

If you experience engine failure or any significant mechanical issue while on the road, roadside assistance may tow your vehicle to a nearby mechanic or service centre for further assessment and repairs. However, the cost of repairing the engine or any related components would generally be the vehicle owner's responsibility.

It's important to note that specific coverage and benefits can vary depending on the roadside assistance provider and the type of membership or insurance policy you have. Some extended roadside assistance plans or comprehensive insurance policies may offer additional coverage options that include engine repairs or contribute toward the cost of repairs.

It's always important to review the terms and conditions of your roadside assistance program or insurance policy to understand the exact coverage provided.

What are some of the common causes of engine failure?

Engine failure can be a frustrating and costly problem for car owners. Several factors can contribute to engine failure, including:

  • Lack of maintenance: neglecting regular maintenance tasks such as oil changes, fluid checks and filter replacements can lead to engine problems over time. Contaminated or low-quality oil, worn-out spark plugs and clogged air filters can cause excessive engine wear and eventual failure.
  • Overheating: engine overheating can occur due to coolant or oil leaks, a malfunctioning thermostat, a faulty water pump or a blocked radiator. When the engine gets too hot, it can cause severe damage to internal components, leading to engine failure.
  • Timing belt or chain failure: the timing belt or chain synchronises the movement of engine valves and pistons. If it breaks or slips, the timing can go out of sync, leading to engine damage or failure.
  • Fuel system issues: problems with the fuel system, such as a clogged fuel injector or a malfunctioning fuel pump, can result in inadequate fuel delivery, poor combustion, and engine misfires, ultimately leading to engine failure.

What steps should I take if my car experiences engine failure?

Experiencing engine failure can be a stressful situation, but taking the following steps can help mitigate further damage and ensure your safety:

  • Pull over safely: when you realise your engine has failed, try to safely manoeuvre your vehicle to the side of the road or a designated parking area. Turn on your hazard lights to alert other drivers.
  • Call for assistance: contact a roadside assistance service or your preferred towing company to have your vehicle assessed on the spot or transported to a trusted mechanic or repair facility. Avoid attempting to fix the engine issue yourself, as it could cause further damage.
  • Notify your insurer: if your car is covered by car insurance, contact your insurance provider to report the engine failure. They can guide you on the next steps and provide information on any coverage you may have for repairs or towing (depending on the situation).
  • Consult a qualified mechanic: once your vehicle is at a repair facility, have a qualified mechanic inspect the engine to diagnose the cause of the failure. They’ll be able to provide you with a more accurate assessment of the repairs needed and an estimate of the costs involved.
  • Consider repair or replacement options: based on the mechanic's assessment, you can decide whether to repair or replace the engine. Consider factors such as the age and value of your vehicle, the extent of the damage and the cost-effectiveness of the repairs.

Remember, engine failure can be an unexpected expense, but regular vehicle maintenance and prompt attention to warning signs can help prevent or minimise the chances of experiencing such issues.

Common questions about car insurance and engine failure

Will my insurance premiums increase after my car’s engine failure?

Reporting an engine failure may lead to an increase in the cost of your insurance premiums. Insurance companies consider various risk factors when determining premiums, so if your car experiences a major mechanical fault, it signals a higher risk, potentially resulting in higher premiums in future. However, each insurance provider has its own criteria, so it's best to consult with them for specific information regarding premium adjustments.

What happens if my car's mechanical fault causes an accident?

If a mechanical fault in your car causes an accident, liability can vary depending on the circumstances. If the fault was due to a known issue that you neglected to address, you may be held responsible for the accident and your insurance company might not offer any cover. However, if the fault was sudden and unexpected, you may be covered for the damage sustained in an accident, but not the repair of the fault itself.

Can engine failure be caused by poor-quality fuel?

Poor quality fuel can contribute to engine problems and potentially lead to engine failure. Contaminated or low-quality fuel may contain impurities or inadequate lubrication properties, which can damage the internal components of the engine over time. Ensuring you use high-quality petrol and maintain it properly can help reduce the risk of engine failure.

How does engine failure impact my car's resale value?

Engine failure can significantly impact a car's resale value. Prospective buyers are often hesitant to purchase vehicles with a history of engine problems. The cost of repairing or replacing the engine, coupled with the perceived risk of future issues, can lower the value of the vehicle. It's essential to address engine failure promptly and keep records of any repairs to maintain the best possible resale value.

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