Four Ways Extended Warranty Companies Avoid Paying Your Claim
Snakes and weasels, all of 'em!
Friends…
We need to have a conversation about your car’s extended warranty.
You all know what I’m talking about. The dealership car salesman tries to sneak an extra $3000 onto the backend of your car loan. He promises complete and total protection for anything that might go wrong with your vehicle. Every conceivable repair is covered for the rest of your life. Companies with bullshit fairy dust names like “CarShield” or “American Dream Auto Protect.” They run ad campaigns that remind you of creepy, low-budget, late night infomercials.
No worries! Unicorns and rainbows! It’s all good!
In professional terminology, I call this weasel shit.
These people are slimy, greasy weasels and they are, in fact, up to some weasel shit.
As your friendly neighborhood automotive service advisor, I’ve dealt with just about every warranty company you can think of. Let me give it to you straight, just in case my super professional explanation wasn’t clear. These companies are not your friend. They do not want to cover a repair on your vehicle when something breaks. These companies are that asshole guy from Titanic that tries to kidnap a child and hop on the lifeboat. They will spend every ounce of their time and energy stonewalling, obfuscating, and conniving in order to deny your claim.
Say it with me, folks. Weasel shit.
Considering we’re all about education here on this illustrious publication, let’s go over a few of the most common tactics that these bastards will utilize to ruin your day.
Tactic #1
The Infinite Teardown
“We can’t deny your claim until you’ve spent thousands of dollars in teardown that may or may not be covered!”
This scenario plays out like this:
You bring your car into the shop to address an issue. Maybe it’s a dreaded check engine light. Maybe it won’t start. Doesn’t matter. My technicians will take a look and figure out what the problem is. Typically, this involves some time for proper diagnosis. We work up an estimate and tell you all about it. Good news! We know how to fix it!
But wait!
You’ve got an extended warranty! Hooray!
Let’s get this claim started. I’ll call the warranty company and explain the issue, along with the recommended repair. I’ll send them the inspection report. I’ll send them pictures. All the evidence will be there clear as day. Their response?
“We need your mechanic to conduct further teardown to identify the root cause of the issue.”
Doesn’t matter if we’re 100% confident in the repair. Doesn’t matter if we’ve seen this same issue on hundreds of vehicles. Doesn’t matter if your contract clearly states that the repair should be covered. The game here is simple. Scare the shit out of you, the customer, with the threat of a large diagnostic bill if the repair is deemed to be “not a covered repair.”
I once had a customer who needed an engine replacement. Their poor car literally had a rod protruding from the engine block, puncturing the oil pan. You could touch it with your hands just by looking underneath the vehicle. Seems pretty straightforward.
Engine go boom. Need new engine. Engine go vroom.
The response from the warranty company when presented with this overwhelming evidence?
“We need your technician to completely disassemble the entire engine to determine the cause of failure,”
I shit you not, friends.
I asked the con artist nice lady on the other end of the phone, “What specifically do you want us to disassemble?”
Her response:
“Every movable component of the entire engine compartment needs to be taken apart and laid out across the floor for inspection by our claims adjuster, who we’ll be able to send in about a week.”
Incredible.
Your engine contains about 4 billion moving parts. Maybe. I didn’t count them, but your warranty company sure as hell isn’t going to either. The trick here is that the amount of labor time to take everything apart in such a way, displaying it all across the shop floor like some kind of Indiana-Jones-found-a-Kia archeological dig site, would be thousands of dollars. Guess what most people decide to do in this scenario? They chicken out like a seventh grader at a school dance.
Warranty company: 1
Customer: 0
Tactic #2
The Complete and Total Fabrication of Part Numbers
Despite how many negative things I have to say about warranty companies, yours truly did purchase one for his own vehicle a couple years back. Don’t judge, I’m an expert. You should have seen the look on the salesman’s face when I insisted on reading the entire ten-page contract right there at his desk. He was… less than thrilled. Turns out, six months later I needed to utilize this warranty for some A/C repair. Good thing I work at a repair shop. I pulled out my contract and read through it. Good news! Just about everything that could be covered was included, excluding “belts and hoses.”
We identified the problem and came up with a solution. My vehicle, like many on the road today, has a dual A/C system for keeping passengers in the back comfortable. Metallic A/C lines run a good length of the underside of the vehicle. Unbeknownst to me at the time of purchase, there was a slight nick in part of the rear line, allowing refrigerant to leak out slowly over time. No big deal. A common practice today is to splice directly into the line and patch the hole. Pretty standard stuff. Altogether, maybe a $500 repair once all the refrigerant and labor is accounted for.
When I called my warranty company to start a claim, I told them all about our findings and provided all the necessary documentation. Metallic A/C line, refrigerant, labor, etc. The dickwad gentleman on the other side of the call chuckled in a devious way and said flatly, “hoses aren’t covered,” before denying the claim and disconnecting the call.
Interesting.
I stepped outside and called them up from my personal cell as a confused customer. When I asked for clarification about why the repair wasn’t covered, I was told: “The part numbers your mechanic gave us are on our list of non-covered parts. Sorry about that!”
Pure unadulterated, top tier, grade A, certified weasel shit.
No part numbers were given, something I’m keenly aware of because I did, in fact, initiate the claim from behind the counter.
Jokes on those assholes, however, because I called up my Toyota parts department and ordered the entire A/C line assembly (classified as a metallic line assembly you sneaky bastards.) When I gave these scumbags a call back at the warranty company and called out their bullshit, the claims adjuster on the other end of the call let out a deep sigh and begrudgingly approved the repair. Amusingly, he was audibly distressed about this whole affair. $1600 and way more parts and labor than I would have even needed, all covered. Serves ‘em right, I say.
Weasel shit company: 0
Yours Truly: 1
Tactic #3
Wear and Tear on Everything. Forever.
Now, this one gets a little tricky. Perhaps venturing into a bit of a grey area, but hey, after everything I’ve seen these people try to pull on unsuspecting old ladies and young adults, fuck ‘em.
Many warranty contracts will have a clause that looks something like this:
Repair or replacement of components needed to improve operating performance due to normal wear and tear. This includes, but is not limited to, blah blah blah…
This clause is designed to keep the warranty company free from the responsibility of replacing things that naturally wear out over time. Things like tires and brakes. We all know these will need replaced eventually. But often, the warranty companies will use this clause to deny claims for all sorts of things. Everything from gaskets and seals to suspension components.
But fear not, friends! I’ve found the solution to combat these cretins. We’re going to use their own tactics against them. With words and vague definitions as our weaponry, we can punch these unscrupulous grifters right in the mouth.
Take, for example, the story of Tom.
Tom had an extended warranty. The contract was pretty good, actually. Looked to me like just about everything was covered. He needed quite a few things on his vehicle. Control arms, shocks, struts. These are all suspension components that are typically deemed “wear and tear” items.
Were these components “worn out?” Were they “fatigued?”
No sir, these components suffered from a specific type of problem. You see, these things had (deep breath), “Failed outside of expected manufacturer specifications and were no longer conducive to the safe and effective operation of the vehicle.”
What expected manufacturer specifications? Shit, I don’t know guys, but neither does some dude named Chad who gets a nice little bonus for denying as many claims as he can. They even sent an inspector to verify the information we provided. That guy was awesome. He took some pictures, test drove the vehicle, and then looked me straight in the face and said:
“This thing drives like shit.”
Sure does, buddy. Sure does. $3000 worth of suspension repairs covered.
Chad, the douchebag who won’t cover your repair: 0
Tom: 1
Tactic #4
The Conditional Preexisting Condition of Unknown Conditions
And finally, one of the most nefarious tactics in use by these companies. The preexisting condition clause. Your warranty contract probably has a clause that looks an awful lot like this:
“This Agreement does not provide coverage for any failure, condition, or defect that existed prior to the effective date of this Agreement, whether known or unknown at the time of purchase…”
Now, let’s think about this one for a minute. Any condition, whether known or unknown at the time of purchase could include quite a few things. What if your newly purchased vehicle had the absolute dogshit beat out of it by a 19-year-old kid before it was repossessed? What if it was a rental and wasn’t properly maintained for years? The unfortunate truth is that most people aren’t very good at following any kind of proper maintenance schedule. Life happens. Things don’t always go according to plan.
Imagine if your homeowner’s insurance behaved in such a way?
“Unfortunately, based on a combination of vibes and this morning’s astrology chart, we have reason to believe that this tree had been thinking about falling on your house for quite some time.”
Or your health insurance?
“Sorry to inform you, sir, but you’ve been slowly dying this whole time before our company even existed. Who would have thought?”
Ludicrous.
Here’s a great example. You tell me if this sounds like something the average car buyer is likely to know or care about when shopping for a vehicle.
Our wonderful friends at the General Motors Company have an engine design that is notorious for causing catastrophic failure under certain conditions. What conditions? Well, cold temperatures, of course! Who lives in cold temperatures? Why, millions of people for a few months out of the year. Six or seven widely popular vehicles all share this engine design, the 2.4 Ecotec.
Let’s get technical for a minute. Put the nerd glasses on, I promise this won’t take long.
During cold weather driving, moisture buildup can occur in the positive crankcase ventilation system, allowing PCV passages and/or hoses to freeze and become clogged. The result of this freezing or clogging may allow crankcase pressure to skyrocket beyond acceptable levels, resulting in the weakest point of failure to give way, typically the rear main seal. This allows for the engine to dump several quarts of oil within minutes, resulting in catastrophic engine failure up to and including bent valves and compromised internal engine components.
Whew, all done.
Now, does that sound like something Grandma Shirley would have any fucking clue about? Does that sound like a preexisting condition? Sure. One might also say it sounds a hell of a lot like an embedded design flaw that any risk assessment team would know about before, I don’t know, INSURING THE VEHICLE?!
Sorry gang, I don’t have a scoreboard here. I’ve never been able to win this one. But the message from the warranty companies is always the same in a situation like this.
“Not our problem, sucks to be you, loser!”
So, what’s to be done about all this? How can the unsuspecting consumer navigate this treacherous and often fraudulent environment? Does this all mean that every extended warranty is a scam?
Yes and no.
Some companies are easier to work with than others. I have, on occasion, walked away with a pretty good result for my customers. I even have one or two that I’ll recommend without losing sleep over. These companies can provide a valuable service where everyone wins, although it’s rare.
If you do decide to purchase a warranty on your next vehicle, read every page of the contract.
Twice.
Pore over that document like it’s a ransom letter. Don’t assume anything. When it comes time to use your warranty, don’t back down. Fight and push to keep these people honest. And if the smiling salesman at the dealership tries to tell you that “everything is covered,” you’ll know exactly what’s going on.
It’s probably some weasel shit.
Thanks for reading.
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See you in the next one.
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