Buying Auto Warranties Online? – Do Your Homework First

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.

A recent casualty was the online warranty giant US Fidelis Auto Warranty, who in 2010 filed for bankruptcy and left thousands of customers wondering how to pay for repairs.

If you’re in the market for a vehicle extended warranty plan, and don’t want to end up like the customers of US Fidelis Auto Warranty, how can you be sure the auto warranty 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 administrator is backed by a reputable insurance company. If a warranty administrator files for bankruptcy, a prearranged insurance agreement will protect you and will pay for your future breakdowns until your policy expires. Check to see if your extended warranty administrator has insurance backing, then verify the financial ratings of the insurance company by visiting AM Best Financial Rating Systems. 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. Never purchase a car extended warranty from a car warranty administrator that lacks insurance protection against claims loss.

You can research the AM Best Insurance ratings for all auto extended warranty companies here. AM Best is the leader in Insurance ratings Included are indicators for financial strength.

When considering an auto extended-warranty company, you should find contract language and wording about a protective layer of insurance 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.”

Make Sure Your Auto Extended Warranty Company has an “A” rating with the Better Business Bureau

The Better Business Bureau is a good source to measure how well customers are finding the claims telephone experience and road-side-assistance services working. You’ll want to do business with extended warranty companies that have an “A” rating from the BBB. You can access the Better Business Bureau here: Warranty Companies and their BBB rating

Are you a candidate for an auto extended warranty? Ask yourself these auto warranty questions.

Learn the number one reason why auto warranty claims are denied.

About the authors: As an 11 billion dollar U.S. business per year, the auto extended warranty is an integral part of the vehicle ownership experience for millions of Americans.

Written by a group of industry professionals with a combined 30 years experience, WarrantyWatchman.com is a consumer protection site and premier source for information regarding auto-extended-warranties.