Coverage Terminology: It's Important to Know the Difference
WHAT IS EXCLUSIONARY COVERAGE?
Exclusionary Coverage, the name it's self sounds confusing. Very often we hear these comments;
- “I saw a list of parts on the contract but I didn't see anything about my motor, transmission or any of the other stuff under the hood.”
- “This doesn't make any sense to me, why would I buy a warranty that doesn't cover my engine.”
- “I don't understand this at all! I can't make heads or tails of this stupid contract.”
Exclusionary coverage is actually the best warranty you can purchase in the aftermarket. Most vehicles have between seven and eight thousand parts on them; it would be almost impossible to list each and every part that the warranty provider will cover. So instead of listing seven to eight thousand parts for the repair facilities, and the customer to read through the warranty provider list all of the parts that are not covered. Therefore if the part is listed under the exclusions section of the contract, IT IS NOT COVERED. If the part is not listed under the exclusions section of the contract, IT IS COVERED!
Exclusionary contracts are always superior to any other type of coverage. All vehicles that are still under the manufacturer's warranty are eligible for this type of coverage. Most vehicles five years old and newer having less than 50,000 miles on the odometer also qualify for exclusionary coverage. However you will pay a surcharge if your vehicle has over 36,000 miles on the odometer. Even with the surcharge this type of coverage is still the best choice.
THE TRUTH REGARDING BUMPER TO BUMPER COVERAGE?
Please allow us to dispel one myth that is used by many in the industry regarding BUMPER TO BUMPER COVERAGE. Some of the largest most reputable warranty providers including dealers use this phrase regularly. Why is this? Because somewhere behind closed doors a marketing department or consultant came up with the notion that if we call it a" bumper to bumper warranty " people will believe that it is the same coverage that the manufacturer placed on the vehicle when it rolled off the Final Line at th Assembly Plant. However, true " bumper to bumper coverage " is what was placed on the vehicle from the manufacturer and is generally a 3 year or 36,000 on most models and can extend out as far as 4 years and 50,000 miles whichever occurs first. The "manufacturers warranty" covers more than any other warranty you will ever purchase. Don't blame the broker or the warranty company, this is a marketing tactic that everyone in the warranty industry has been forced to use.
WHAT IS LISTED COMPONENT COVERAGE?
The listed component contract is much easier to understand because it lists in detail exactly what the extended warranty contract will cover. In other words it list each and every part that is covered by the service agreement, IF IT IS NOT LISTED, IT"S NOT COVERED!. Some contracts offer Wear and Tear coverage for an additional fee, this coverage is an excellent option to select if available. Simply defined it covers parts that don't break but fail to operate to the manufacturer's specifications.
Other warranty contracts offer added coverage for the Hi-tech Electrical System, 4 Wheel Steering, Diesel, All Wheel Drive / 4X4 as well as Turbo and Superchargers. Hi Tech Electrical coverage is a bonus, most claims come from the creature comforts we use every day, such as power windows and locks, cruise control, power moon roof and air conditioning etc.... A warranty that covers these items can be worth it's weight in gold.
WHAT IS POWERTRAIN COVERAGE?
Powertrain coverage is the base building block on which all other Warranty packages are built and probably the most basic plan you can purchase for your vehicle. Ultimately, with this type of coverage you are looking for the warranty to cover: 100% of the cost of parts and labor to repair / replace any of the following items however not limited to the: Engine Block, Transmission / Trans Axle Case and Rear Axle housing in addition to any of their internally lubricated items in the event of failure to perform the task for which they were designed.
WHAT DOES WRAP COVERAGE DO?
Wrap coverage is a supplemental insurance for the peripheral components in your vehicle. For example if you have a vehicle with a Listed Component or Powertrain warranty that is still in effect you may want to buy coverage for additional items that it doesn't cover. That's how Wrap Coverage works.
On a personal note, Wrap coverage can be an invitation to have a claim denied unless you purchase it from an established company. The last thing you want is to have two administrators fighting over who is responsible for paying your claim. Wrap Coverage can be a great money saver for owners of vehicles with a manufacturer's 5 year 100,000 mile Powertrain warranty.
ROADSIDE ASSISTANCE
Most extended service agreements offer roadside assistance programs similar to your auto insurance company.
Benefits of Roadside Assistance in your warranty contract may include: Emergency roadside service, towing, flat tire repair or replacement, battery assistance, gasoline delivery and emergency lock-out service. You should read your service contract for exact details of the plan's benefits. If these options are a necessity for you, make sure the provider has a 24 hour toll free Roadside Assistance number.