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There are many different types of extended warranty offers available. Understanding the auto warranty contract is not always easy, especially if you have no previous knowledge. Below are the more important features to look for.

The Administrator is the party that pays your warranty claims. The Administrator is typically not the same company that has sold you your extended warranty. You should always try and find out who the Administrator of your policy is before purchasing. You need to check with the BBB to see what kind of record they have and if they make payments on claims timely.

Mechanical Breakdown / Failure
This section of your policy will describe the types of claims a warranty will offer coverage for. A good auto warranty plan will offer coverage for mechanical breakdowns that are a result of broken parts as well as wear-and-tear. Better warranties will cost more, but you get what you pay for.

Auto warranty plans that cost less will typically only pay for issues that are a result of mechanical breakdowns. The normal wear-and-tear and decline as a result of age of the vehicle will not be covered.

The older your car is, the more likely that mechanical breakdowns are caused by wear-and-tear, rather than a defective part.

Before you purchase any warranty with wear-and-tear, make sure you are 100% clear as to what your policy covers. Never assume that your contract will cover any repair just because you have wear-and-tear coverage. Every policy is going to have a different interpretation of wear-and-tear.

Making Repairs
Your auto warranty plan will either allow you to use any repair shop you want, require you to use the dealer from which the warranty was purchased or at local participating dealer locations. Find out before you buy the policy.

Getting Paid
Your claims can be paid for in one of two ways. The extended warranty issuer will either pay the repair shop directly via credit card over the phone or by mailing a check, or you will pay for the repairs out-of-pocket and be reimbursed by the auto warranty provider.

These are items that are not covered by the extended warranty. You need to go over all of the exclusion items of any policy very carefully. Every warranty is going to be different. It is not uncommon for warranties to be sneaky about the wording and defining of exclusionary items. If you have any questions, contact us.



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