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A-Rated: A rating
by the independent insurance evaluator A.M. Best. An A-rating
(A-, A, A+) is the highest ranking an insurance company
can receive. It means the company is absolutely stable.
Administrator:
The company that is responsible for authorizing the repair,
and for paying the claim. The administrator ensures that
your vehicle is repaired correctly and in compliance with
your contract.
A.M. Best & Co:
A.M. Best Company is the premier insurance analyst. It offers
evaluations for more than 7,000 insurance companies. A.M.
Best & Co. is more than a century old, and many players
in the financial community, and consumers, rely on Best’s
ratings system understand an insurance company’s stability.
Authorization:
The approval provided by the warranty administrator to permit
repairs to be performed.
Auto Warranty:
An extended service contract that agrees to pay claims
for mechanical failures and breakdowns. Also know as a Vehicle
Service Agreement, Extended Service Agreement, Mechanical
Breakdown Agreement, or Extended Warranty. This type of
policy is intended to protect a consumer from paying for
unexpected vehicle expenses.
Better Business Bureau:
The BBB is a consumer organization that monitors a company’s
record of addressing customer complaints. A company affiliated
with the BBB Online Reliability Program agrees to confirm
to the BBB Code of Online Business Practices and agrees
to cooperate with the BBB to resolve disputes. Most companies
who participate in this program value their reputation and
tend to have an excellent record of addressing customer
concerns. Investigating a BBB record is important.
Bumper to Bumper:
Also known as an “exclusionary” policy. This is the most
complete extended auto warranty in existence. A bumper-to-bumper
contract lists only parts excluded from coverage, since
there are too many covered parts to list. Unless a specific
part is not listed on the contract, then it is covered by
a bumper to bumper plan.
Cancellation: A
cancellation provision permits the extended warranty
holder to cancel the contract and to obtain a refund. Most
extended auto warranties allow a 30 day money-back guarantee,
providing there has been no claims. Cancellation refunds
are normally prorated based on the remaining time and miles
in the plan.
Corrosion Warranty:
A corrosion warranty is a manufacturer’s warranty that
covers claims for rust and perforation on the metal body
of the vehicle. Such a plan can also be purchased on an
aftermarket basis.
Deductible:
The amount that a customer is responsible for paying
the repair facility for a claim, as stated in your extended
auto warranty policy. The warranty company pays the balance
of the claim. Deductibles usually range from $0 to $200.
Lower deductibles are typically options that can be purchased
for a small charge.
Diagnostics: The
effort by the repair facility to determine the cause of
the vehicle’s problem, and to determine the necessary course
of repair. Most auto warranty plans typically do not cover
diagnostics, unless the diagnostics lead to the repair of
a covered component.
Eligibility:
The level of warranty coverage available on a particular
vehicle based on certain criteria. Eligibility is typically
based on the vehicle’s age, mileage, make and model. Other
important factors are whether the vehicle is a four-wheel-drive,
is turbo/supercharger, and its number of cylinders. History
and usage can also be factors, for example whether the vehicle
is used for commercial purposes. Each extended auto warranty
plan has its own set of eligibility requirements. Many extended
warranty plans offer riders, or surcharges, for certain
components or usages.
Exclusionary Policy:
Also known as a bumper-to-bumper policy. This is the
most complete extended auto warranty in existence. A bumper-to-bumper
contract lists only parts excluded from coverage, since
there are too many covered parts to list. Unless a specific
part is not listed on the contract, then it is covered by
a bumper to bumper plan.
Extended Auto Warranty:
An extended service contract that agrees to pay claims
for mechanical failures and breakdowns. Also know as a Vehicle
Service Agreement, Extended Service Agreement, Mechanical
Breakdown Agreement, or Extended Warranty. This type of
policy is intended to protect a consumer from paying for
unexpected vehicle expenses.
In-Service Date:
The original purchase date of the vehicle’s first owner.
The first owner can have been a rental agency or other company.
Inclusionary Policy:
Also known as a “Stated Component Coverage” extended warranty.
The contracts for inclusionary policies list covered components.
If the component or part is not listed then it is not covered.
Inspection: The
examination of your vehicle by a certified technician. A
pre-warranty inspection is when a technician ascertains
the condition of the vehicle, and notes any problems, or
the lack of any. Inspections are sometimes required by some
auto warranty companies for higher mileage or older vehicles.
Insurer: Also known
as re-insurers, the insurance company that guarantees the
obligations and responsibilities of the warranty administrator.
Any reputable auto warranty company is backed by, or insured
by, a traditional insurance company to guarantee the payment
of claims should the auto warranty be unable to do so.
Make:
The vehicle’s manufacturer.
Manufacturer:
The company which produced your vehicle.
Manufacturer's Recommended
Maintenance Guidelines: These are the manufacturer’s
suggestions for properly maintaining your vehicle to ensure
optimal performance. Usual maintenance guidelines would
include when to change the oil, information about fluid
levels, when to rotate the tires, and replacement of certain
parts at specific intervals. Not following the manufacturer’s
recommended maintenance schedule may void the warranty agreement.
Manufacturer's Warranty:
This is the warranty supplied by the maker of the vehicle.
It promises to repair your vehicle for a specified period
of time and/or mileage. Manufacturer’s warranties typically
are not all-inclusive, and cover only a limited number of
specific components. Carefully review your manufacturer's
warranty agreement for coverage details and specifics.
Model:
The nameplate of your vehicle.
New Vehicle:
As related to auto warranties, the term new vehicle
refers to a vehicle that is covered by the manufacturer's
bumper to bumper warranty. For a vehicle to be “new” for
a warranty does not mean that the vehicle was purchased
with no miles, or you are the first owner, simply that the
vehicle is still covered by the original manufacturer’s
warranty.
Odometer Miles:
The actual miles the vehicle has traveled as recorded
by the vehicle’s odometer. Failure, removal, or adjustment
of the odometer will void an auto warranty agreement, unless
whatever repair or modifications has been certified by the
repair facility and documented to the warranty company.
Plan Expiration:
This is the date or odometer mileage when the extended
auto warranty policy will conclude. For example, a 5 year
/ 100,000 mile extended warranty will end 5 years from the
date that you enroll your vehicle or when the odometer reads
100,000 miles. The plan expiration is recorded in the warranty
agreement.
Plan Mileage: The
total mileage that the extended warranty plan applies to
your vehicle. Usually this is the mileage on the vehicle’s
odometer, but can also be additional mileage from the commencement
of coverage, or unlimited mileage based on the extended
warranty plan coverage expiration terms.
Plan Term:
The amount of time in years or months and/or the total
mileage that your extended auto warranty policy will apply
to your vehicle.
Powertrain Coverage:
This is warranty that provides coverage for, typically,
components of the engine, transmission, and drive train.
A powertrain policy normally covers only the components
that are most expensive to repair on a vehicle.
Product Warranty:
Product warranties generally cover fewer parts than an regular
extended warranty, service contract, or mechanical breakdown
insurance policy. A product warranty is permitted by law
only to cover parts that are in direct contact with the
product or parts that are mechanically connected to those
parts. For example, a manufacturer of an air conditioning
lubricant may warrant that by using their product the air
conditioner will not break. However, the maker of the lubricant
is not allowed to warrant that the power window won’t break,
since a window is not in direct contact with product and
is not mechanically connected to a part in contact with
the lubricant.
A product warranty may not be sold for a separate price
and must be provided free of charge along with the product.
Product warranties typically limit how much you can recover
for parts that need repairs. Unlike extended warranties,
product warranties are sometimes not backed by an insurance
company.
Ratings: Ratings
are independent assessments for reporting a company’s financial
strength. (see A.M. Best & Co. and A Rated.)
Re-insurer: Also
known as a Re-insurance Company. An insurance company that
issues a policy to guarantee, or re-insure, the financial
responsibilities of the warranty provider.
Rental Benefit:
The amount you will be reimbursed for obtaining a rental
vehicle/ substitute transportation while your vehicle is
being repaired. Rental benefits are only reimbursed if the
breakdown was caused by a covered part or component. Rental
benefits are specified in the warranty contract. There will
be criteria related to the number of hours a car must be
in the shop, for example, to use the rental benefit. Other
criteria relate to the number of days that the benefit can
be used, or the maximum dollar amount to be reimbursed.
Repair Facility:
A place where vehicles are repaired. More specifically,
warranty companies require that the customer use a licensed
auto repair facility as described in your specific extended
auto warranty plan. This includes, but is not limited to,
a dealership, service station, or national repair center.
Roadside Assistance:
An additional auto warranty plan benefit that offers
emergency assistance such as towing, battery jump, flat
tire repair, fuel and fluid delivery, or help if you are
locked out of your vehicle. These benefits are normally
accessible through the warranty company’s claims number.
Stated Component Coverage:
Also known as an inclusionary policy. The contracts
for inclusionary policies list covered components. If the
component or part is not listed then it is not covered.
Transfer: A vehicle
with a transferable warranty can have the warranty transferred
to another owner if the vehicle is privately sold. Sometimes
there is a nominal transfer fee, and/or the number of transfers
is limited.
Travel Interruption Benefits:
Reimbursement for food and lodging expenses due to mechanical
breakdown of your vehicle during a trip, usually further
than 100 miles from home
Used Vehicle:
As applicable to extended warranties, the term used
vehicle means that a vehicle is outside of its original
manufacturer's bumper to bumper warranty. This term does
not mean that the vehicle was not purchased with no miles,
or that you are not first owner, only that the vehicle’s
original manufacturer’s bumper to bumper warranty has ended.
Vehicle Identification
Number (VIN): The serial number of the vehicle.
The VIN is assigned by the manufacturer based on the vehicle’s
individual characteristics, such as the year built, and
country of final assembly. The VIN can be found in several
places:
1. The vehicle’s title
2. The vehicle’s registration
3. The vehicle’s insurance card
4. A plaque on the driver-side dashboard of the vehicle,
observable through the outside looking in.
Wear and Tear:
Auto warranty coverage for parts that have worn out so that
they are operating outside of how they were designed to
operate. This is a much deeper coverage of parts than found
in a standard extended warranty. Normal maintenance items
are not covered, such as brake pads/shoes, rotors/drums,
clutch plates, wiper blades, and fan belts.
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