I’m not suggesting that home warranty insurance arrangements are a cake walk.
I can only speak from experience. In NSW there’s a 6 year statutory warranty on major building defects and 2 years on minor defects. Getting an engineer (or in some cases licenced builder) to report on an obvious and often visible/accessible building defect is usually cheaper, easier and more conclusive than trying to do anything with mechanical engineers in a situation where conclusive proof is simply much harder to nail down. For example, if foundations fail it’s pretty obvious and you don’t have to conduct scientific analysis to prove why they failed. In the OP’s case an engineer would have to run a controlled test with the right oil and the wrong oil, analyse the results and then conclusively rule out any other factors that could have caused the failure. Nearly impossible and very, very expensive compared to what could be gained.
In my experience with statutory building warranty a Fair Trading Inspector visited the house, could readily see the issues, reviewed the report by a licensed builder, and an order was struck. I’ve been down this path once and it was actually quite refreshing as I expected a total cluster. Maybe I was just lucky. The Home Bldg Compo Fund might not be perfect, but no such thing exists for vehicles.
I’ve been through a tribunal once for a matter involving an engine that was rebuilt by a dealership but never ran right and then blew itself to bits. Essentially the dealership’s behaviour was disgraceful and they had a lot more wriggle room than the builder did while the case took much longer to resolve. Again, maybe I was just lucky.