Back

Does Auto Insurance Cover Transmission Repair?

If you’re wondering does auto insurance covers transmission repair, well that depends on the cause of damage. If your car’s transmission gets damaged gradually due to wear and tear, then your auto insurance won’t cover it. However, if it’s due to any accidental damage then yes, your auto insurance will cover the transmission repair or replacement costs.

When Does Auto Insurance Cover Transmission Repair?

Auto insurance is specifically designed to protect you financially from accidental damage unforeseen risks such as a peril due to fire outbreak, or natural disasters such as flood, earthquake, storms etc. So, your auto insurance coverage will only apply when your transmission gets damaged or breaks down due to accidental damage or peril.

Typically, your auto insurance won’t cover any transmission repair caused by gradual wear and tear. If there’s an issue with your transmission or if it suddenly requires maintenance your auto insurance policy won’t cover the repair or replacement costs.

The transmission is the most vital part of the car, and sometimes the cost of repairing or replacing it can exceed your coverage limit. So, when that happens your insurer will declare your transmission and car a total loss and will pay the up to the coverage limit based on your car’s actual cash value.

After you pay your deductibles, your insurer will subtract your car’s depreciated value and cover the amount up to your coverage limit. For example, if you bought the car for $40,000 in March 2025, and after 5 years your car has depreciated by $5,000. Now, let’s say you have an insurance deductible of $2,000.

So, after you pay your deductibles of $2,000 your insurer will cover the rest of the cost for transmission repair and replacement. In this case, your insurer will pay you $35,000 (40,000 – 5,000) for your car’s transmission repair and replacement.

If the cost of repairing or replacing your transmission exceeds your coverage limit, you will have to pay the remaining costs out of pocket.

Types of Auto Insurance that Covers Transmission Repair

There are different types of auto insurance coverages that compensate accidental damages for specific incidents. To help you properly understand the types of auto insurance that cover transmission repair, here’s a detailed discussion as follows.

If you're looking for affordable auto insurance in Michigan, we offer a variety of coverage options to fit your needs. With regional offices in Flint MI, Saginaw MI, and Mt. Pleasant MI, we’re here to serve you locally.

Collision Auto Insurance

The collision auto insurance is an optional but crucial auto insurance policy that covers accidental damage due to collision. Whether your car has crashed into another vehicle, or object, collision insurance will cover the expenses up to your coverage limit regardless of whoever is at-fault for the accident.

So, if your transmission gets damaged due to colliding or crashing into another vehicle your collision auto insurance coverage will pay for your transmission’s repair and replacement costs up to your coverage limit.

Comprehensive Auto Insurance

Comprehensive auto insurance has been specifically designed to protect your car from perils, and unforeseen accidents that are beyond your control which includes damages due theft, vandalism, fire hazards, natural disasters such as storms, flood, earthquake among others.

So, if your car’s transmission gets damaged or breaks down due to any of the above-mentioned incidents your car’s transmission repair or replacement costs will be covered by your insurer up to the car’s actual cash value, or coverage limit after deducting your deductibles and depreciation.

Mechanical Breakdown Insurance (MBI)

Mechanical breakdown insurance, also known as MBI in short, is a specialized add-on auto insurance coverage that pays for mechanical issues which includes the engine, transmission, air conditioning, exhaust and other vital components of your car.

So, if your car’s transmission gets damaged in an accident, or peril, the MBI will cover the repair and replacement costs. In some cases, MBI also covers sudden transmission breakdowns or failures.

However, similar to the other types of auto insurance coverages MBI does not cover transmission repair costs for wear and tear or routine maintenance.

Uninsured/Underinsured Motorist Coverage (UI/UM)

Let’s say you have collided with another vehicle and your car’s transmission gets damaged and needs repairing. Now the other driver either does not have adequate liability auto insurance coverage or none at all.

On top of that, if the other driver can’t afford to compensate your car’s transmission repair costs out of pocket, then you will need an alternative financial backup, and that’s specifically what the uninsured/underinsured motorist coverage is for.

So, if the other driver is unable to pay for your car’s transmission repair or replacement costs then your uninsured/underinsured motorist coverage will pay for the repair costs up to your coverage limit.

In Michigan about 20% of drivers are uninsured, and on a national scale about 14% of drivers are uninsured. This means that without the UM/UM insurance coverage, you’re technically at risk of a financial burden, especially if the other driver is legally liable to compensate for the damages.

Learn More: What Happens if You Don't Have Car Insurance?

Does Gap Insurance Cover Transmission Repair?

No, gap insurance does not cover any mechanical issues including transmission repair or replacement costs. Typically, gap insurance particularly pays the car’s actual value and any additional amount that you owe for financing the car on loan.

If your car gets stolen, damaged, or totaled, the gap insurance will cover the repair and replacement costs up to your coverage limit, but here your insurer is compensating the loss for the car itself not just your car’s transmission.

The Bottom Line

Auto insurance is mainly designed to protect you financially from accidents. So, that’s why it does not typically cover transmission repairs until it’s due to an accidental damage or peril.

Although there is always a substantial chance of your transmission getting damaged due to an accidental collision, or any unforeseen event. And that’s why it’s necessary to consider ensuring that you’ve collision auto insurance, comprehensive auto insurance, mechanical breakdown insurance, and uninsured/underinsured motorist coverage in your auto insurance policy.

If you're looking to secure coverage for transmission repairs and other mechanical components, contact us today to get a free quote and consultation. Our insurance experts will look into your requirements and concerns and recommend you the best auto insurance coverage within your budget.

FAQs

Will insurance cover a blown transmission?

Your auto insurance will only cover a blown transmission if your car has been damaged in an accident or a peril. If your car’s transmission gets blown due to gradual wear and tear, you won’t get any insurance coverage.

Will insurance total a car for transmission problems?

This mainly applies for older cars. If your car’s transmission repair or replacement cost is more than its actual cash value, then your insurer will declare your car as totaled or a total loss.

Does full coverage insurance cover transmission?

Full coverage insurance generally includes auto insurance coverages such as liability auto insurance, collision auto insurance, and comprehensive auto insurance. So, it does, as full coverage insurance includes collision and comprehensive auto insurance coverages. You can also add other types of optional auto insurance coverage to your full coverage insurance such as mechanical breakdown insurance, and uninsured/underinsured motorist coverage and more.