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Automobile Warranties. What are you buying?

I just hung up the phone from a robot call telling me that my car warranty was expiring and I needed to renew right away in case my car developed some catastrophic mechanical failure. I laughed.

In Arizona, car warranties are considered insurance policies and are governed by the State Insurance Commission. I recognize that there is some debate about this but will strongly assume that car warranties are covered by the insurance code as they are licensed and it is not uncommon for them to be so.

Last month I received a call from a gentleman who told me that his car warranty company had just stuck it to him and wouldn’t pay a thing and asked, since I was an adjuster, would I help him? I’ve never done anything like that but thought it would be a good opportunity to broaden my knowledge about this vast and peculiar industry we deal with. Not only that, i bought a new car myself this year and fell for the warranty pitch. Hey, nobody is perfect or the time share companies would be out of business.

I set out to handle his claim, I sent a letter. No response. I sent another letter. No response. Another letter, a phone call: nada, butkis. This warranty company loves collecting premiums but isn’t thrilled if someone presents a claim.

The client’s vehicle was turn down with parts all over the garage waiting for the Car Warranty Rep to arrive before authorizing a $ 9,583.79 repair.

The rep came. He grinned widely and then he jabbed everyone in the heart when he said “we don’t pay for carbon buildup”, reminded the client that it was his responsibility to pay for the tear down and marched away.

Shortly after that I became aboard. I know cars. I know all engines have some kind of carbon buildup but the car dealership’s shop has given us documents showing the cause of the loss to be 3, 5, and 7 cylinders had rings that seized. The car warranty company has ignored that diagnosis.

Still no response from Car Warranty Company and, get this, the Warranty Contract says disputes will be handled in Denver! If they ever call me back.

Car Warranties … What are you buying?

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