The head gasket seals the gap between the cylinder head and engine block, and when it fails coolant can leak outside the engine or inside, into the combustion chambers. In either case, the engine is losing coolant and will soon overheat, which could cause expensive damage to major engine parts. Because a leaky head gasket will make the engine run hotter, it should trigger a warning light. Other signs are steam coming from the engine and/or exhaust, and a low coolant level. If none of that occurs, everything should be cool with the head gasket.
Original post by Cars.com.