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UNDERSTANDING EXTENDED WARRANTIES
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.
Administrator
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.
Wear-and-Tear
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.
Exclusions
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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