Warranty Info
Warranty Info

• Who Are You Really Buying Your Warranty From?
  

  Did you know that in most instances, the company you are buying your warranty from has nothing to do with paying your warranty claims? The safest way to buy an extended automobile warranty is to buy direct form the warranty administrator.
  
  Warranty Administrator – This is the company that actually issues the warranty and is responsible for paying any claims. This is the company that should come under the closest scrutiny by consumers. Buying coverage direct from an administrator offers the most security as your money goes directly to the company responsible for fulfilling the obligations under the warranty contract. You will also be able to obtain the same coverage they sell through car dealers and avoid the car dealer’s markup. Administrators will offer you pre-sale counseling and after sale support.

  There are many warranty administrators (national and regional) with varying business models. You should select a company that offers their coverage through many different channels and not just the Internet. Like insurance companies, the larger the pool of warranty holders, the more likely the company is financially stable and has adequate funds to pay future claims.

  Regional warranty administrators tend to be small and have a smaller base of customers. National warranty administrators will offer coverage through car dealers, financial institutions (banks, credit unions) and may even handle warranty programs for manufacturers. With a larger, more diverse customer base, these companies are more financially sound. When a warranty administrator handles coverage for banks, credit unions and manufacturers, you can bet those companies did a lot of research before selecting a warranty partner.

  
  More and more states are regulating the sale of extended warranties. Larger states like California, Florida and New York have licensing requirements and have done the homework for you. If a company is licensed in all of these states, that is a good indication of a stable company and one dedicated to compliance.

  * * * *

  Internet Only Warranty Companies – Based on our 14 years of selling coverage direct to consumers on the Internet (and 27+ years through car dealers, banks and credit unions), we have seen companies with this business model come and go. While the Internet allows consumers to buy products at more affordable prices than traditional selling channels, companies that only do business on the Internet present a risky business model.

  Internet only companies are loosely regulated and some are not regulated at all. As they do not sell through car dealers or other channels, they are able to bypass the regulatory requirements that more and more states are implementing to protect consumers. These regulatory requirements most often deal with the company’s financial health.

  By only selling warranties on the Internet, these companies are not able to amass a large customer base and often are not able to set aside appropriate funds to pay future claims. They take in money on Monday to pay claims on Tuesday. Couple this with a lack of regulatory over-sight and you have a recipe for disaster.

   

  Questions you should be asking…

  How long has the warranty administrator been in business?
  Have they been around long enough to have been through several claims cycles?
  Do they set aside adequate funds to pay future claims?
  Do you sell your products only on the Internet?
  When you type their company name into a search engine, what are their customers saying about them?
  Are they members of the Better Business Bureau?
  How many complaints do they have on file?
  Are they members of WebAssured.com?
  Are they Dun & Bradstreet verified?
  Are they able to do business in all 50 states?
  Are they recommended by reliable, trusted automotive web sites?
  Do they have a formal complaint resolution process in their contract?
  

• Why Do I need an Inspection, Others Don’t Require Them?
  

  We are asked this question quite often. Why do you think we ask our customers to take this additional step? 

  Two reasons:

  An inspection protects you as well as Warranty Direct

  We are in the business of paying claims and not denying them due to “pre-existing conditions”. Denying claims due to pre-existing conditions is a favorite pastime of many warranty companies. If you do a few Internet searches, you’ll see that to be true.

  Here’s what you find in warranty contracts that don’t require inspections:

  ‘We will not cover the repair/replacement of a covered part to correct conditions that may reasonably assumed to have existed at the inception date of the coverage provided under this contract”

  Whose reasonable assumption would be used here?

  When Warranty Direct inspects your vehicle, we are then both agreeing that your vehicle is in good working order. Of the hundreds of inspections our customers have performed each month, over 94% of the vehicles pass inspection. The others simply have the needed repairs made and then coverage is initiated.
  

• Buy Direct or From a Broker?
  

  Buy direct from the company responsible for paying your claim. A warranty broker bears NO repsonsibility to you. Here's what an online warranty broker has written on their web site. We think it says it all.

  FAQ: I understand that  <warranty company>  is a warranty broker. Who am I actually purchasing the warranty from?

  It is important to note that <warranty company> is a broker of auto warranties and has negotiated the best price and coverage for you with the actual warranty provider. We do not process or pay for any claims. These matters are handled by your warranty company. You are actually purchasing the warranty directly from the warranty provider you’ve selected and any claims should be directed to their claims department. Please keep the warranty company claims phone number provided in your vehicle in the event you need to have repairs done.

  By purchasing a warranty through <warranty company>, no contract is made between you, the purchaser and <warranty company>. You are actually purchasing the warranty from the warranty company and not <warranty company>. <warranty company> does not agree to and is not liable for payment of any claims and is not liable or responsible for insolvency of any warranty company.

  Warranty Direct is NOT a broker or an Internet only company.  When you purchase from us, we agree to be liable for and pay your claims. It's what we do and have done...for 27 years.

• Differences Between Exclusionary and Named Component Warranties
  

  Bumper-to-bumper auto warranties represent the highest level of coverage available.  Be careful, many companies use this term quite loosely.  By definition, a bumper-to-bumper plan is exclusionary, that is, it will only list the parts NOT covered, just like your factory warranty.  Make sure to read the full list of the exclusions as they are not all the same. If an extended warranty lists the items that it covers, it is NOT a true bumper-to-bumper warranty.

  Named component auto warranties (there are many different levels of named component coverages) will list the parts that are covered. If a part is not on the list, it is not covered. You can buy an extended car warranty with as few as 50 or so parts covered to as many as 750 with varying levels in-between. Don't be fooled, while a named component automobile warranty may look as complete as a true bumper-to-bumper warranty, they are not nearly as comprehensive.