Written by Tim Marsh
When you purchase a car, it’s important to find extended car warranty insurance to provide you with the level of coverage that you need. Even if the dealership or manufacturer provides a new car warranty, it is going to expire at some point – and this insurance will
provide you with the extension needed to save you money and keep your car running longer.
There are 6 key things to look into when you purchase a new car warranty or even a used car warranty.
#1 – Small Claim Limits
There should be no small claim limits on the warranty that you purchase. Whether it is a spark plug or some other issue that doesn’t cost a lot of money, you should be able to make a claim and have the company cover the expenses.
You are paying for the warranty insurance for a reason – and you need the company to make good on their promise. Some will put limits on the number of small claims that you can make through the life of the policy.
#2 – What’s covered
Make sure you know what is covered and what not covered in the policy, very few policies cover everything; items such as exhaust system, turbo charging, driver wear and tear issues are usually not covered, for instance.
Be sure to check the exclusionary clause of any insurance
#3 – Provider Reputation
It’s important to look at the reputation of the insurance provider. If you have never heard of the company, find out if they are regulated by the industry or if they have a parent company that you have heard of. Take the time to read reviews and establish what their reputation is amongst current customers. If you read a lot of negative details about the company, it’s likely that you aren’t going to have a positive experience with them either.
#4 – Payout of Claims
You need to find out what the payout percentage is of their claims. This is something that you can ask the company or look up online. A high percentage needs to be found so that you can feel comfortable with the company’s ability to pay on a claim that you may make at some point during the warranty period.
The last thing you want to do is find out that the company isn’t going to pay out on a claim that you have made – leaving you to pay out of pocket for the problem on your car. Some companies have a very low payout rate. They are more focused on collecting the monthly payment premium from everyone and then making money on the misfortune of others. You can avid this problem simply by knowing to look into it.
#5 – Length of Term
What is the length of term you are being given? You want to get an extended car warranty that lasts for as long as you plan on driving the car so you don’t encounter major problems that you would be responsible for paying for. This is where you may have to read the fine print. Some coverage levels are tiered, which means you may get full coverage on some items for the full length of the term and other coverage levels will taper off after the first year.
Your goal is to get the coverage for as long as possible. If you don’t get the coverage you need now, it may be impossible to get extended car warranty insurance later on as you will now have a used car. And if you can get it, it will likely be more expensive.
#6 – Clauses
This is where you need to read the fine print to find out what the insurance provider isn’t telling you. For example, are you tied to servicing your car solely with the dealers or can you go anywhere? This is important because if you move from one territory to another, you don’t want to drive back to where you purchased the car every time you need it services. Take the time to ask questions about what you need to know about the policy.
The insurance provider should give you a copy of the terms and agreement before you spend any money and before you attach a signature to the documents. Read through everything and if you have questions, ask for them to be explained to you in detail before you choose your warranty insurance policy.
By taking the time to look into these 5 things, you can avoid problems with your car warranty for a new or used car. You need coverage and as long as you check out all aspects of the contract, you can receive quality coverage that you can count on.