Does Car Insurance Cover Mechanical Issues?

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It is daunting to deal with engine issues and other mechanical issues that can plague your beloved vehicle. Additionally, mechanical failures can be expensive to repair and resolve. Car insurance covers the cost of accidental damages and losses including fire and allied perils, vandalism and more. But not all car insurance covers mechanical problems. However, if you have the right car insurance in the UAE, your insurer may bear the expenses of mechanical repair.  

With comprehensive car insurance, you may receive insurance benefits depending on the policy, but holding a third party liability cover won’t provide you with any financial assistance for engine failure.  Go through the article below to understand under what circumstances your car insurance pays for mechanical failures and, whether you can opt for add-on riders to secure your vehicle from mechanical issues.  


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*Above mentioned prices are for Honda City EX 1.5L, 2017 model.
*Above mentioned prices are for Honda City EX 1.5L, 2017 model.

How Does Car Insurance Cover Engine Failure?

Most car insurance in the UAE does not cover the repair expenses in case your car engine is blown. However, any engine failure caused due to events that are covered under your policy may receive an insurance benefit. In case of accidents, fire, vandalism and other threats, car insurance covers the repair cost even if your car is totally lost. But, no insurance plan separately covers the repair or replacement cost of engine failure specifically. 

Following are some coverages along with inclusions. 

  • Collision Coverage: As the name suggests, collision insurance pays for the repair expenses if your car involves in an accident. The insurer may provide cashless claims for agency repair or within its network of garages. Damages to the engine and car body due to accidents are covered under this plan. Collision insurance is an integral part of comprehensive insurance. 
  • Comprehensive Coverage: A comprehensive car insurance covers the repair expenses for almost any kind of damages to the vehicle including property and bodily damages to uninsured parties. The comprehensive car policy pays for losses such as theft, vandalism, third party malicious acts, crashing animals, and losses due to natural calamities. 
  • Third-Party Liability Coverage: Third-party liability coverage is the most basic car insurance plan and mandatory coverage under the UAE Federal Laws. The plan ensures the safety of uninsured individuals who are not part of the insurance plan. Any damages cause to a third party due to the insured vehicle, the insurance company compensate for the damages as per the policy terms and conditions. 

Is there any Car Insurance that Covers Engine Failure?

In a few cases, your insurance may cover the cost of mechanical failure and engine problems that may require repairs. Mostly, engine failures are covered under the warranty if you have purchased a new vehicle. Otherwise, you may also consider buying an engine failure coverage commonly known as mechanical breakdown insurance (MBI) if your insurer provides it. 

Warranty Coverage

As a new car owner, you get a warranty period for specific miles or time periods.  Even if you buy a used car within the warranty period, the company covers the repair and replacement coverage. Warranty for a car in the UAE comes in two variants as mentioned below. 

  • Bumper-to-Bumper Warranty: Through bumper to bumper warranty, the company provides coverage for almost every car part during the warranty period. Although the bumper themselves are not covered under the warranty in case of accidental damages. But, the engine and mechanical breakdowns are covered within the warranty. Until and unless specified, most vehicle parts are covered under the bumper to bumper warranty. 
  • Powertrain Warranty: Power train includes the engine, transmission system and other vital parts employed in making the vehicle move. As the name suggests, the power train warranty secures your car’s engine, transmission system and driving axel. Other parts excluding the power train are not covered under the warranty unlike the bumper to bumper warranty. 

For the car owners, the manufacturers provide the option to extend the warranty beyond what’s already offered with an additional cost. The car warranty is usually based on the vehicle’s mileage or specific period. For example, a car with a warranty period of 3 years and 50,000 km means the company would cover failure expenses for a maximum period of 3 years or up to 50,000 km whichever comes first. By paying an additional cost, you can also extend the warranty for another tenure depending on the company. 

Mechanical Breakdown Insurance (MBI)

Several car insurance companies offer mechanical breakdown insurance as an optional coverage. An alternative to extended warranty, MBI offer wider coverage in comparison to the extended car warranty. With a mechanical breakdown insurance plan, almost all kind of engine and mechanical failures are covered the policy. However, failure due to normal wear and tears are not included in MBI. Similar to car warranties, the mechanical breakdown insurance also secures the car for a specified period. 

However, most car insurance companies in the UAE do not offer MIB and, you may need to explore the insurance market online if you are keen in purchasing such protection plan. Among various factors, the cost of mechanical breakdown insurance depends on the car manufacturing year, model, and the cost of your vehicle.  Although you may receive car insurance for mechanical breakdown, there may be certain limitation to it depending on your insurance provider. 

Differences Between Extended Warranty and Mechanical Breakdown Insurance

If you have purchased a new vehicle, the manufacturing company offers warranty as its enhanced services. The warranty is simply an assurance from the company where it repairs the operational failures of engine and mechanical parts. In other case, if you have purchased a used car with an active insurance period, you get a transferred warranty from the previous owner which covers mechanical failure in the same way as a new car. You can also extend your warranty period by paying warranty extension cost with the manufacturer or third-party warranty providers. There are several warranty providers in the UAE where you can shop for extended warranty as per your needs and time period. 

Mechanical breakdown insurance on the other hand is a policy that covers the repair expenses and other required replacements. However, you need to verify if you still have an active car warranty, you should not opt for MBI as it would duplicate your security coverage. In most cases where the vehicle qualifies for mechanical breakdown insurance, it is under the warranty period. 

Almost every car manufacturer covers the mechanical failure through powertrain warranties and the rest of the car’s body is secured through bumber to bumber warranties. 

Additionally, the powertrain warranty secures your engine and transmission for a longer tenure than bumper to bumper warranty and helps you fix issues such as axel and gears failures, transmission, emission control system, transfer case, engine and drive system. 

Extended Warranty and Mechanical Breakdown Insurance - Which one to Choose?

Both extended warranty and mechanical breakdown insurance have there of set of advantages.But, if you are concerned about which one to choose, you can cosider the feature and benefits offered by extended warranty and mechanical breakdown insurance. In a general sense, the both mechanical breakdown insurance and extended warranty are similar, however, the MIB is cheaper, flexible and has a broader coverage considering the chain of service centers. But, the extended warranties are easily available for a large variety of vehicles and car models. 

You can decide the security plan depending on your security requirements, available options and most importantly the cost of the protection plan.

Does Gap Insurance Covers Mechanical Breakdowns?

Precisely, the gap insurance does not cover mechanical breakdown such as engine seizure or broken transmission. It is an optional cover that can included in your car insurance. With this insurance, the insurer secures the difference amount that you to owe to the bank after booking a car. 

In case of mechanical failures or any other losses, you can claim the difference amount. However, the Gap insurance by itself won’t cover the cost of mechanical breakdown. 


Most comprehensive car insurance plans secures your vehicle from a variety of threats. However, they do not cover engine failure and mechanical breakdowns. You may opt for a mechanical breakdown insurance (MBI) add-on to secure your vehicle from engine failures. Among other options, you can choose extended warranty for engine and transmission security. Both MBI and extended warranty provide similar benefits however, you need to choose the cost effective option depending on your requirements. For an extended warranty, you need to pay the cost upfront while in the case of MBI, you can pay the insurance cost in installents. 

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