December 30, 2014 - by
Extended auto warranties – protection plans that go above and beyond the warranties offered by the manufacturer – are an excellent safety net that can help protect you if something fails a few years after you purchased your vehicle. However, extended warranty plans don’t cover everything that might happen, and you could find yourself facing a claim that’s been denied.
What To Do When A Claim Is Denied
There are several important steps to take when you first hear that a claim under your extended warranty plan has been denied.
- Start by getting the ruling in writing. You’ll want to talk with whoever came out to look at the job and get a full report from them – information from the adjustor will be a major boon if you decide to appeal the claim.
- Next, talk to your service provider and find out whether or not they agree with what the adjustor told them. It’s not unusual for a claim to be denied because an adjustor didn’t think the broken part was covered under the plan, but your technician may actually disagree with the adjustor’s finding. If they do, get their opinion in writing as well, then talk to your adjustor about it. You might be able to convince them to change their mind. However, if both the technician and the adjustor agree that the problem wasn’t covered under your warranty, there may not be anything you can do.
- Extended warranty plans typically require you to pay the cost of repairs yourself, after which you’ll be reimbursed by the company providing the warranty, since the technicians want to get paid and the warranty company wants protection if a denied claim is appealed. When you receive the letter of denial, talk with the company about their appeals process. Protocols vary, but try to send a written appeal if you can – these tend to be more successful than appeals over the phone.
- During the appeal process, you will want to clearly explain why you disagree with their denial and clearly explain why you think their decision should be changed. For example, if the service provider fundamentally disagreed about the cause (and you have that explanation in writing), you can use that to refute the adjustor’s claims. Include all relevant evidence when you first send in the appeal.
Once you’ve sent in your paperwork, all that’s left is waiting for their final decision.
Finally, be ready to recognize it if you’re fighting a losing battle. You may have no chance of overturning the adjustor’s original decision, and if that happens, you’ll have invested a lot of time and energy for no return. That’s why it can help if you focus on…
Stopping Claims From Getting Denied
Having a number of denied claims on your record could be a problem in the future, so it’s worth trying to avoid having any claims denied. Fortunately, there are a number of things you can do to help stop denials from happening in the first place.
- Begin by understanding your extended warranty. This means reading all of it – yes, all of it, including every single line of the fine print – and making sure you understand the terms of the agreement and what it actually covers. If you’re familiar with your policy and the components of your vehicle, then you should be able to accurately predict what kinds of repairs will be covered and what kinds won’t. Talk to an expert if there’s any part of the policy you don’t understand – most policy providers have representatives that you can contact over the phone or through e-mail, and they’re usually happy to answer any questions you have about the policy. They may also offer several policies that cover different things, so look through all of your options.
- Next, double-check your policy and ensure it covers wear-and-tear. Many mechanical issues that vehicles face fall under this category, and it’s common for policies to deny wear-and-tear claims. Keep in mind that there are often limitations on what wear-and-tear policies cover – the company may only be willing to pay for part of the costs (up to a certain limit), and you should compare what the policy covers to average repair costs before signing up for the policy.
- Finally, check for a list of approved service shops. The repair process tends to go smoother when repairmen and warranty companies have worked together in the past – and more importantly, a warranty company is more likely to accept the repairman’s judgment if they’ve worked together many times in the past. This does limit your options somewhat, but the end results tend to be better.
Finding The Best Extended Auto Warranties
Buying an extended warranty from the right company can make all the difference. Unscrupulous companies often create agreements so complex that what they really say is “We’re not covering anything”. More reputable companies are actually focused on helping cover you, and they’re considerably more likely to approve the average claim.
Start by doing your research online and looking for independent reviews of the company. Avoid checking the company’s website for testimonials – those are easy to fake, while it’s much harder to fake a series of reviews from people whose histories you can actually look up. Alternately, ask your favorite vehicle repair shop about extended warranty providers. They can tell you which companies they work with and who is most likely to pay out on claims – these professionals are an excellent source of information, and you may even want to begin your search with them instead of online.
Don’t forget to talk to the warranty company before you buy. Reputable companies tend to answer questions promptly and ensure you understand the coverage you’re given, while untrustworthy companies usually try to avoid answering hard-hitting questions.