Does Gap Insurance Cover Blown Engine?

Experiencing a blown engine can be an extremely stressful and expensive situation. You may be wondering if gap insurance can help cover the cost of repairs or replacement in this scenario. Unfortunately, gap insurance will not provide coverage for a blown engine.

Here is an overview of what gap insurance is, what it covers, and why a blown engine is not included:

What is Gap Insurance?

Gap insurance is an optional add-on coverage you can purchase when financing or leasing a new car. It protects you if your vehicle is totaled or stolen.

Specifically, gap insurance covers the “gap” between what your car insurance pays out for the value of your totaled vehicle, and what you still owe on your auto loan.

For example:

• Your car is totaled in an accident
• It’s worth $15,000 based on its current book value
• But you still owe $18,000 on your auto loan

Gap insurance will pay the $3,000 difference so you don’t end up owing money on a car you no longer have.

What Gap Insurance Covers

Gap insurance provides protection in situations where your car is:

• Deemed a total loss in an accident
• Stolen and not recovered

In both cases, your standard car insurance provider will pay only the depreciated market value of your car. Gap insurance fills the gap between that payout and the remaining loan balance.

Why Gap Insurance Doesn’t Cover Blown Engine

When an engine blows, it means the internal components have failed and the engine no longer functions. This requires extensive repairs or full engine replacement.

However, a blown engine does not mean the vehicle meets the criteria for being “totaled.” The car still exists, it just needs mechanical work. Gap insurance only applies if the entire vehicle is lost.

A blown engine also does not make the car a theft loss. Therefore, this type of mechanical breakdown is not covered by gap insurance.

Other Ways to Cover a Blown Engine

While gap insurance won’t help with your blown engine, here are some options that potentially could:

• Manufacturer’s warranty – Most new cars come with a powertrain warranty. This covers the engine for the first 3-5 years or 36,000-60,000 miles.

• Extended warranty – An extended warranty or vehicle service contract may cover engine repairs beyond the factory warranty period.

• Mechanical breakdown insurance – This optional coverage pays specifically for mechanical failures like a blown engine.

• Comprehensive coverage – If debris on the road causes the engine damage, comp insurance may help.

• Credit card protections – Some cards provide coverage for mechanical breakdowns when you use it to pay for auto repairs.

• Emergency fund – Self-insuring for car repairs through an emergency savings account.

While gap insurance can be valuable protection for total losses, it does not apply to blown engines. Review your current coverages or consider adding warranties or breakdown insurance to handle major mechanical issues.