How Do Extended Warranty Companies Handle Claims?

RENTAL CAR

  1. The Extended Warranty Company will not authorize any rental car expenses until they have accepted responsibility for the claim.
  2. You may rent a car at any time that is convenient for you. The problem doing this is, if the Warranty Company denies your claim, you will have to pay for the rental.
  3. The amount of rental car expenses allowed under your contract may be tied to the number of labor hours needed to complete the authorized repair and is not tied to the down-time of your vehicle. Some contracts allow one day rental for every eight labor hours it takes to do the job . If the Extended Warranty Company only authorizes a used transmission they generally will not pay for a rental car even though the repair might take a week or more.
  4. The maximum amount paid by the Warranty Company is usually $25 to $35 per day for three to five days.

DIAGNOSIS

  • Warranty Companies rarely pay to diagnose the problem with your vehicle.

MAINTENANCE RECORDS

  • Warranty Companies frequently ask for maintenance records paying close attention to dates and mileage.
  • Many contracts specify that maintenance receipts be computer generated and hand written receipts will void the contract.

ADJUSTER

  • The authorization to pay a claim may be delayed if the Warranty Company decides to send an adjuster to take photos and inspect your vehicle.
  • The adjuster may be instructed to drive your vehicle before the transmission, transfer case or differential is removed to verify the complaint.

TEAR DOWN

  • An accurate estimate to repair or rebuild a transmission, transfer case or differential may require the removal and complete dis-assembly that allows the adjuster to view and photograph the damage and also enables us to prepare an accurate parts list.
  • The Extended Warranty Company dictates that you authorize the removal and dis-assembly of your transmission, transfer case or differential. This is the policy of all Extended Warranty Companies and the purpose is to determine if it is a covered expense and to reduce needless claims.

COMPLETION TIME

  • The time it takes to complete your repair may be delayed for one or more of the following reasons:
    • It may take a day or two before the adjuster shows up.
    • The Warranty may take a day or so deciding if they are going to pay for it.
    • If they only authorize a used component, it may take a couple days before it arrives.

LABOR RATE

  • Most warranty Companies limit the labor they will pay for a repair.
  • You may be required to pay the difference between the amount the Warranty Company will pay and the amount required to do the job properly.

DEDUCTIBLE

  • Most Warranty Companies require the owner to pay a deductible of $50 or $100 per component per occurrence.

FLUID & FILTER

  • The Extended Warranty Company usually will not pay for filters and lubricants as they view them as maintenance items.

SEALS

  • Seals, O-rings and gaskets are always included when we rebuild a transmission, transfer case or differential.
  • When installing a used transmission, a new front pump seal, axle seals and a pan gasket are prone to leak and should be replaced.
  • Some salvage yards require those seals to be replaced along with a new filter or they may void the warranty. Many Extended Warranty Companies require the customer to pay for them.

LKQ

  • LKQ is an industry term used to describe a used component such as a transmission. It stands for LIKE, KIND and QUALITY.
  • The contract you have with the Warranty Company may only obligate them to return your vehicle to its "pre-breakdown" condition.
  • That means they may send us, or have us supply, a used component that matches the one in your vehicle. Theoretically that means the used transmission must have the same number of miles on it, or less, than the one in your vehicle.
  • You have the right to have us properly rebuild your transmission and pay the difference between it's cost and the amount the Warranty Company is willing to pay. EXAMPLE......if a used transmission will cost $1,600 to install and a quality rebuilt is $2,300, you may elect to pay the $700 difference and get a longer warranty.
  • Most used transmissions come with a 90 day warranty. If you have a year or two left on your warranty, a used transmission may be an acceptable risk.