Auto Insurance Claims: Autotheft, insurance expert

Question
This claim is regarding a 2006 Nissan Titan with 87,000 miles on it, worth approximately $10,000. Eight months ago I was told by the dealership that I needed new catalytic converters in my truck, they cost ~$3,000 because they are one unit with the exhaust manifolds, so I did not replace them.  Soon after the engine began smoking and the dealership said that I now need to either replace or rebuild the engine due to bad piston rings resulting from the back pressure caused by the catalytic converters.  I had the exhaust replaced as it was full of oil and the catalytic converters cut out because I could not afford to replace them but I had to remove the back pressure before repairing the engine.  I then drove the truck to an auto shop of choice and paid $2,300 to have the engine rebuilt.  I found this shop online and had no prior connections with them, I chose them for their fair prices.  The mechanic was arrested three weeks after I dropped the vehicle off driving my truck 91MPH almost 200 miles away from the shop.  He was arrested for driving with a suspended license and the truck was not reported stolen at that time because I thought it was in the shop.  He was using the truck for hauling engines, put 1,300 miles on it and had made no repairs.  I paid ~$900 to tow the truck back to a local dealership, the same one that told me I needed a new engine. They found ~$2,300 in body/interior damage and told me that the exhaust and catalytic converter (piping and exhaust manifold) are full of oil and need to be replaced.  Also, the engine is no longer rebuildable due to metal shavings found in the oil and must be replaced, they can also confirm that the engine did not have metal shavings in the oil prior to the theft.  The State Attorneys Office has upgraded the claim to auto theft but they are moving slow and this guy will probably never pay me a dime.  I have full coverage and insurance is covering the body damage and towing but nothing mechanical.  They are contributing the mechanical damage to prior damage caused before the vehicle was stolen.   I now have to replace the piping that I had the catalytic converters cut out of, which is one unit with the exhaust manifolds and will cost ~$3,000.  Also I have to replace the exhaust again and finally I must replace the engine instead of rebuild it.  I feel these are real damages directly resulting from the auto theft, but insurance disagrees.  Should these damages be compensated?  If they are, should the engine be replaced with a new or used one?  Thank You for your time!

Answer
Hello Jacob,

Mechanical issues are never covered in an auto policy.  If there is actual damage to mechanical parts as a result of an accident or a theft, that would be covered, but pre-existing mechanical problems would never be covered.

You mention the metal shavings not being present before the theft. That's a very fine line. Still, I find it unlikely that they are going to afford coverage for that.

Have you pursued a claim against the shop's coverage?  You might have better luck there - at least with the metal shaving issue - depending on the terms of their coverage - assuming they have any.  But nonetheless, it is highly unlikely that any policy is going to pay you for pre-existing mechanical issues.

Insurance is designed to bring you back to your state prior to the loss.  It is not intended to improve your condition.

Sorry,
Jane