subject: All About Extended Auto Warranties [print this page] All About Extended Auto Warranties
When the manufacturer car service contract on a car ends, the consumer is left to pay for subsequent repairs out of pocket. This can be quite costly and the cost mounts as the vehicle ages. An auto warranty beyond the initial contract term is something that every driver should consider. Car owners may avoid these because they are unfamiliar so it is helpful to provide some basic information.
The extended service contract includes both a premium cost and a deductible, just like the initial manufacturer coverage. A separate deductible charge is required at each repair visit so repairs should be combined whenever possible. Plans with high deductibles offer a way for individuals to reduce their premium costs. Late-model vehicle owners sometimes select high deductible plans because they do not foresee many repairs.
Most often misunderstood is how to handle the vehicle repair process but it is not really complicated. A high-quality policy permits the vehicle to be repaired at a car dealership or an ASE-Certified repair shop. A repair facility will thoroughly inspect the vehicle to diagnose all issues and will then call the policy's claims center. Policyholders will need to provide the center contact number and their policy number.
The claims center will discuss the issue with the repair facility and provide authorization for covered repairs. The policyholder will be responsible for paying the deductible, so this money should be readily available. When the repairs have been completed and approved by the policyholder, the repair facility is paid by the claims department. Some service contracts permit only the policyholder to be reimbursed by the claims department so the individual should research this issue before taking the vehicle for repair.
Service agreements provided by reputable online agencies are both renewable and transferable. This means that as long as the vehicle meets the agency's underwriting guidelines, the agreement may be renewed for another term. While an agreement is in effect, it may be transferred to another private party should the vehicle change ownership. Many agencies also provide the option for an individual to cancel the policy within a certain period as long as no claims have been made.
Not everyone is comfortable doing business online, so individuals may wonder if the agency will be operating when a claim is incurred. The best agencies deposit premium payments into a reserve account subject to government regulation. This money is used to pay future claims and the plan is also insured by an insurance company. This means that if the agency itself goes out of business, the insurance carrier will take over claims handling.
These are the most basic questions about an aftermarket auto warranty and should help with the purchasing decision. Other features to consider include flexible methods of payment like credit cards, money orders, payment plans, and personal checks. Having an extended service contract allows an individual to spend hard-earned money on things other than car repairs.
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