Will My Car Insurance Policy Cover Engine Failure?

Businesses with vehicles and drivers need commercial car insurance coverage. Most states require this coverage, while each state has its own insurance laws. What happens if your company car breaks down due to engine trouble? Is there a certain type of insurance that pays for a new engine? As with many insurance issues, there are several variables to be considered.

What Is Commercial Car Insurance?

Commercial car insurance coverage is similar to personal auto coverage except that its clients are businesses that own vehicles. Most states require such businesses to carry commercial auto coverage.

The Cause of Engine Failure

The main factor that determines whether or not your insurance agency will pay for a new engine is the cause of engine failure. If the engine began to falter while you were speeding on a freeway, the insurer might not cover it. However, if engine failure results from an unforeseen disaster, it’s possible to receive benefits.

Auto insurance companies will not provide benefits for degradation from normal wear and tear, which is considered a maintenance issue. The benefits you can collect come down to what you agree to in the contract. If your engine damage was caused by vandals, thieves, fire, or a third party, there’s a good chance you’ll receive benefits.

Car Insurance Types and Engine Failure

The type of auto insurance you carry may or may not include engine failure coverage. It’s not something you should assume is in the plan. Every insurance company designs its own policies. The following are common insurance policy types available to businesses:

Third-party Only

This coverage won’t pay you for a new engine, but it could buy a new one for the party affected by an accident you caused.

Third-party, Fire, and Theft

You can use this coverage to file a claim if you are involved in a crash caused by another driver. This add-on provides coverage if your vehicle is stolen or destroyed by fire.


If you carry comprehensive insurance, it’s possible to receive benefits for engine failure. Again, it comes down to the cause. Remember, it’s your responsibility to ensure your vehicle has regular inspections to take care of maintenance issues. You will probably never get reimbursed just because the engine is old. The cause must be a disaster that’s out of your control.

Proving the Cause

No matter what caused your engine to break down, you may need to prove the cause when you file a claim. So if you think a collision caused by another driver resulted in your vehicle’s engine damage, you’ll need evidence to prove the same. You must handle disputes with insurers over accident causes through the Financial Ombudsman Service (FOS).

Getting the right commercial car insurance coverage is imperative for any business that hires drivers. Be aware of your auto insurance options. Contact us at CF&P Insurance to learn more about what type of specific auto insurance matches your business needs.

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