Who Pays When a Repair Shop's Faulty Work Ruins an Engine

Attorney Answer

The shop that did the work is the most likely responsible party here — not your insurer.

Cal. Civ. Code § 1714(a) makes everyone responsible for an injury caused by their own want of ordinary care or skill in managing their property. A body shop that installs the wrong gasket or seal, letting oil escape and destroying an engine, is being asked to answer for its own workmanship — not for the collision that sent the car there in the first place. That is a claim against the shop, and it does not depend on the insurance policy at all.

Your insurer's position is not automatically wrong. Under Cal. Code Regs. tit. 10, § 2695.8(e)(1), an insurer may not require that an automobile be repaired at a specific repair shop. Where the owner picks the shop, that choice is one reason an insurer is generally not treated as the guarantor of the shop's workmanship. What the regulations do require is that the insurer explain itself. Under Cal. Code Regs. tit. 10, § 2695.7(b), an insurer has 40 calendar days after receiving proof of claim to accept or deny a claim in whole or in part. Under § 2695.7(b)(1), a denial of a first-party claim must be in writing and must list all bases for the denial and the factual and legal bases for each reason then within the insurer's knowledge; if the denial rests on a policy provision, condition or exclusion, the written denial must identify it and explain how it applies. Under § 2695.5(b), a licensee generally has 15 calendar days to furnish a complete response to a communication from a claimant that reasonably suggests a response is expected.

The dealership's diagnosis is the center of this case. A written statement identifying the incorrect gasket or seal, the oil loss and the resulting engine failure is what connects the repair to the damage. Without it in writing, this is one shop's word against another's.

What you can do

1. Ask the dealership for its diagnosis in writing — a repair order or written statement naming the incorrect part and describing how the oil loss destroyed the engine. Ask that the failed parts be kept rather than discarded.

2. Gather the repair file: the body shop's invoice and parts list, the dates the car went in and came out, and the mileage at each point.

3. Write to the body shop, describe the failure, attach the dealership's diagnosis, and ask in writing what it intends to do. Keep a dated copy of what you send.

4. Write to your insurer and ask for its denial in writing with every basis stated, referencing Cal. Code Regs. tit. 10, §§ 2695.5(b) and 2695.7(b)(1).

5. If the insurer does not respond, or the response explains nothing, file a complaint with the California Department of Insurance. Under Cal. Code Regs. tit. 10, § 2695.5(a), a licensee has 21 calendar days to furnish the Department a complete written response. You can also file a complaint with the Bureau of Automotive Repair about the shop's workmanship.

6. Ask a local attorney which claim against the shop is worth bringing and how the limitations period applies to your dates. Most lawyers offer a brief initial call at no cost, and a few minutes on your specific facts with someone who handles these cases in your area is worth more than any general guidance, including this page.

⏱ Time limits apply. A claim for damage to a vehicle runs on Cal. Code Civ. Proc. § 338(c)(1), which sets three years for an action for injuring goods or chattels. When that clock started on your facts — the date of the repair, the date the engine failed, or the date you learned the cause — is exactly the kind of question that decides whether a claim survives, and it is not something to work out from a web page. Have a local attorney check your dates before anything is filed.