Extended Warranties - Articles - Zimbio

Extended Warranty Contracts - What is Wear-and-Tear Coverage?

Mon, 15 Jul 2008 08:31:00 GMT

posted by rdowns

Wear and tear protection is the highest level of coverage one can purchase. Warranty Direct provides coverage for parts that break as well as those that wear out. As many as 30% of all claims filed are wear and tear related. It is a much broader level of coverage than the mechanical breakdown only plans offered elsewhere.

Most extended warranties define "mechanical breakdown" as a defect in parts and workmanship as supplied by the manufacturer, or a defect that makes the part unable to perform the function for which it was designed. Often, they will state that the gradual reduction in operating performance (wear-and-tear) is not covered. Service contracts that exclude wear and tear will not cover repairs needed because a part’s performance has gradually deteriorated because of normal wear and tear, unless a mechanical breakdown has occurred.

The more miles on a car when a repair becomes necessary, the more likely it is that the repair will be needed because a part wore out, rather than because the part broke due to poor manufacturing. Again, many extended warranties do not cover parts that wear out.

Before buying an extended warranty, you should carefully review what is covered and not covered to see whether wear and tear claims are excluded from coverage. That way, if it is not clear whether a repair is needed due to a manufacturing defect or simple wear and tear, it is more likely that the service contract company will pay for the repair. It is a mistake to assume that a repair agreement will cover every repair your car may need.

Read more about wear and tear from the California Department of Insurance:

http://www.insurance.ca.gov/0100-consumers/0060-information-guides/0010-automobile/guide-to-automobile-repair-agreements.cfm

About Warranty Direct

Founded in 1980, Warranty Direct is the direct-to-consumer division of one of North America’s leading providers of service contracts and extended warranties for automobiles. Through its automobile extended warranty portals, www.warrantydirect.com, www.carwarranty.com, www.warrantyinfo.com and www.warrantydirect.ca , Warranty Direct leads the industry in efficient and expedited claims handling, impeccable customer service and a technology infrastructure that far surpasses the industry standard. Coverage is available in all 50 states and many parts of Canada.

For a free, instant online extended warranty rate quote, please click here.

Extended Car Warranties

Sat, 27 Apr 2008 00:40:58 GMT

posted by dazzled

I’ve been checking out extended automobile warranties online, since my car warranty will expire soon. When you buy a new car, an automotive car warranty is always included and covers services, repair, and replacement of the car’s parts for a set period of time or miles. Once that time period or number of miles has passed, though, if you still want to have a warranty on your car you have to buy an extended warranty.

If you buy a pre-owned car, used car warranties are available and you might want to look into them as a safety net. I want a warranty where I can transfer it if I sell the car. That’s a bonus for any car or truck buyer.

Either way, you can buy an extended vehicle warranty directly from an independent company for a whole lot less than it would cost you at a dealership. Dealerships jack the price up on extended auto warranties and those are one of, if not the most, profitable products they sell. So the last thing I want to do is buy my extended car warranty from the dealership that sold me my car.

Instead, I’ve been looking around for a reputable car warranty company that I can trust. An extended warranty on a car is a vehicle service contract between the warranty company and you, so it’s important that it’s a solid company with a great reputation. They’re supposed to deposit part of the purchase price of the warranty in an insured “Claims Reserve Account” to make sure there are plenty of funds to pay a claim. So I’ve read a bunch of articles on auto warranty companies and their coverage plans.

You can get extended auto warranty quotes online for your make and model of car. It’s important to find out about all the programs they offer. You should get quotes from at least a couple of places online so you can compare warranty coverage and price. Here are a couple of places online that are real popular - I suggest you get quotes from both:

Warranties 4 Wheels

and

Keep in mind the prices they quote you are negotiable. You’ll get a quote by email first, then a rep will call you. That’s when you can start your negotiations.

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Warranties and Guarantees

Mon, 10 Apr 2007 18:44:00 GMT

posted by House-ZenGuy

In many industries, there are warranties and guarantees that go along with a product and service. These guarantees are only as good as the company servicing them, as well as the stipulations that cover them. The key here is, there is no such thing as a free lunch. Wheter it's energy savings or home retrofits - you typically get what you pay for...

When talking to a customer about a warranty or guarantee, HZG is explicit in the details as to how the warranty functions. It is important to know that two parties are involved and have responsibilities for a warranty - the holder and the servicer. There are many asterisks involved and it is imperative that you know what they are - such as if it is a waterproofing warranty, plants, sidewalks, driveways, etc. are not covered. If the issue below ground is something else not covered by the warranty, the client would pay. If a crack is greater than 1/16", the warranty is not covered due to coverage...you get the idea.

The following is a banter from the movie Tommy Boy that best reflects warranties in our industry...

Tommy: Let's think about this for a sec, Ted, why would somebody put a guarantee on a box? Hmmm, very interesting.
Ted Nelson, Customer: Go on, I'm listening.
Tommy: Here's the way I see it, Ted. A guy puts a fancy guarantee on a box 'cause he wants you to feel all warm and toasty inside.
Ted Nelson, Customer: Yeah, makes a man feel good.
Tommy: 'Course it does. Why shouldn't it? Ya figure you put that little box under your pillow at night, the Guarantee Fairy might come by and leave a quarter, am I right, Ted?
Ted Nelson, Customer: What's your point?
Tommy: The point is, how do you know the fairy isn't a crazy glue sniffer? "Building model airplanes" says the little fairy, well, we're not buying it. He sneaks into your house once, that's all it takes. The next thing you know, there's money missing off the dresser and your daughter's knocked up, I've seen it a hundred times.
Ted Nelson, Customer: But why do they put a guarantee on the box?
Tommy: Because they know all they sold ya was a guaranteed piece of shit. That's all it is, isn't it? Hey, if you want me to take a dump in a box and mark it guaranteed, I will. I got spare time. But for now, for your customer's sake, for your daughter's sake, ya might wanna think about buying a quality product from me.
Ted Nelson, Customer: [pause] Okay, I'll buy from you.

White Paper - Researching and Selecting an Automobile Extended Warranty Provider (Part 1)

Mon, 22 Apr 2008 12:38:00 GMT

posted by rdowns

Warranty Direct White Paper - How to Research and Select a Warranty Provider

As more consumers learn that there are alternatives to the high price of dealer sold extended warranties, the number of companies and web sites offering them have exploded. How do you know which companies you can trust? How can you research the companies? What resources are available to you?

Warranty Direct, the oldest and largest provider of direct-to-consumer automobile warranties provides you this comprehensive guide to researching and selecting your warranty provider. We understand how difficult a process this can be. We welcome your phone calls to discuss the issues below in even greater detail.

Warranty Pricing…

A question we are often asked is why there is such a wide range of prices for extended warranties. The best advice we have heard to date is this, “Good extended warranties are not cheap; cheap extended warranties are not good”. As you read this White Paper, you will see the many areas that coverage costs can be lowered. Bear in mind that lower cost coverages cover less and will leave you paying out of pocket on most claims.

The Warranty Company…

Warranty Seller – In most instances, this company is a broker offering coverage(s) from regional, third-party warranty administrators. Once the warranty is sold, you will not deal with the seller again. You want to make sure the warranty seller remits payment to the warranty administrator and your coverage is in force. Warranty brokers typically look for the cheapest coverage available so their markups can be higher. Often, they are not concerned with the quality or level of coverage. As they frequently change the companies they represent, they do not develop long-term business relationships that are most beneficial to consumers.

Few warranty sellers are direct administrators of their warranty coverage. Purchasing direct from an administrator is beneficial because you know where your money is going. You maintain the relationship with the company throughout the life of your extended warranty; in other words, the direct administrator will sell you coverage, provide customer service, offer financing and handle all your claims. Buying direct from an administrator also makes it easier to properly research the company that will be responsible to pay for your repairs over the next 3, 4, 5 years or longer.

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 28 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.

About Warranty Direct

White Paper - Researching and Selecting an Automobile Extended Warranty Provider (Part 3)

Mon, 29 Apr 2008 08:37:00 GMT

posted by rdowns

The Coverage…

There are many different levels of coverage available.

Exclusionary Warranties – These are the highest level of coverage one can obtain and are often referred to as bumper-to-bumper warranties. Like a new car warranty, they will cover ALL parts of your vehicle except a small list of exclusions. The exclusions are typically for routine maintenance (oil changes, tune-ups), cosmetic items (seat fabric, carpeting, body molding), and consumable items (battery, brake pads, wiper blades). Read the exclusions carefully as they can differ widely among warranty contracts. Some companies will exclude commonly repaired items like stereo systems, oxygen sensors and more.

Named Component Warranties – These types of coverages will provide a list of the parts covered and are available in many different levels. In order to do a proper comparison, you must read the detailed list and not just the system categories.

Roadside Assistance – Better extended warranties will provide complete roadside assistance membership with each contract. Membership will provide you with 24x7 access to a toll free number to call for help for such things as towing, flat tire assistance, lost key and lockout service, battery jump start, fluid delivery and more. These plans have no deductible and are not tied to covered repairs only.

Lesser warranties provide limited towing benefits (often $50 or $75) that are only available to you for a covered repair. These will require that you arrange for towing on your own and seek reimbursement for the fees you pay.

About Warranty Direct