Recently there has been a flurry of auto extended warranty companies filing for bankruptcy. When the news hits the airways, warranty policy holders scream for justice. The most recent was the online warranty giant US Fidelis Auto Warranty, who in March 2010 filed for bankruptcy and left thousands of customers wondering how to pay for repairs.
So if you’re in the market for a vehicle extended warranty plan, how can you be sure the auto warranties companies you are considering won’t leave you holding the bag for future claims?
Make Sure Your Used Vehicle Extended Warranty Company Has a Protective Layer of Insurance
One way you can protect yourself is to be sure your extended warranty plan is backed by a reputable insurance company. If the warranty company files for bankruptcy, insurance protection will pay for future breakdowns until your service policy expires. You can check the rating of all insurance companies by visiting AM Best Financial Rating Systems.
Learn how to check the AM Best Insurance Ratings of any insurance company.
When considering a car extended insurance warranty company, there should be wording about a protective layer of insurance company backing openly described in the policy similar to the following: “THIS CONTRACT IS INSURED—Our obligations under this contract are guaranteed by an insurance policy issued by (insurance company name, address and policy number). You may file a claim directly with the Insurance Company. Please call (telephone number) for instructions.”
Never Purchase a Car Extended Warranty Lacking Insurance Reinforcement
By selecting an extended auto warranty with credible insurance backing, you’ll avoid paying for repairs that should have been covered if your company goes under. Never purchase vehicle extended warranties for your automobile without solid insurance reinforcement. The best extended car warranties have insurance protection backing their policies. Check the A.M. Best insurance company ratings online. Best’s Credit Ratings are the industry leader in unbiased and comprehensive evaluations of an insurance company’s balance sheet strength, operating performance, and business profile.
Learn how to steer clear of extended auto warranty scams here.
[This article was written by the Warranty Watchman. Permission to republish this article is given provided this statement and link are included with the article.]