Most extended warranty companies, also known as automotive service contract companies, will not pay claims unless you cause a major problem. It is important to know how to make a big stink. You need to first submit your claim again, then contact the selling dealership and finally, work with the general manager (GM) of the dealership. Below is a detailed explanation of all this.
- Service Contract Companies Deny Claims Usually The First Time
- In all my years in the automotive industry, I have seen the exact same thing repeatedly:
- A person has an extended warranty/service agreement on their car
The car breaks down and the repair shop claims it is a problem that should have been covered by the warranty/contract
The service provider, also known as an extended warranty company, says they cannot cover the repair
Service contracts are a standard practice. Because they know that not all claims will be accepted by their service contract company, they are prepared to deny almost every one.
The first thing you need to remember is that even if they deny your claim, it doesn’t mean it’s over. Sometimes, a denied claim will be granted after you submit a resubmission and show that you are able to prove your case.
You should read your contract and then check the claim paperwork.
Even if the repair is covered by your service contract, it is important to read it and understand the details. It’s helpful to know the pertinent sections of the agreement when you are arguing with service contract employees. It is also helpful to understand what the service agreement says about appeals denied claims, cancellations of service contracts, and refunds.
Send a letter and resubmit your claim.
- Attach a letter explaining why your claim was denied to your claim when you submit it again.
- Make sure you explain why the component failed.
- Declare that you expect that the repair will be fully covered and that you plan to appeal any reduction in coverage.
Attach all documentation required to your letter. Make a copy and mail it to the contract company. You can scan all paperwork to email it to anyone who requests it.
Follow-Up On Your Re-Submitted Claim Daily
After your letter has been sent, you can call the service contract company. You should call them daily until they confirm that they have received your letter. Call them every day until they respond to you. Keep a note of the name and date of each conversation you have with someone.
It is important to be polite when calling. These service contract workers are often underpaid and overworked. They also get yelled at quite a bit. It is a good idea to be kind to those who answer the phones. They are more likely to recall someone nice than someone rude and can often make sure that your claim is seen by the right person.
Talk to the selling dealer if your claim is denied again
It’s a good idea for you to contact the dealer that sold the car and service contract if your claim is denied a second time. You can reach the finance manager at most dealerships and explain that your claim is not being covered. You should give the finance manager all details, including how costly the repair will be, what it will cost, and how difficult it is for you to pay.
Next, ask questions
Do service contract companies usually deny claims? Ask them who to call if they don’t say yes. Ask them why they sold the service contract.
If they don’t have the information, ask the finance manager to give you the name and number of someone who works at the company. Instead of giving you the 1-800 number, request that they give you a contact person.
- Ask your finance manager if you can cancel the warranty and get a refund.
- Ask your finance manager if you think they would have better luck at your claim at the dealership’s shop or another shop.
- Follow the Claim Appeal Procedure, then try The Dealership Again
If your claim is not approved, you can appeal the agreement. Appeal can be successful, so it’s important to follow the procedure.
If your appeal fails, call the selling dealer to ask for a second conversation with the finance manager. You should explain to the selling dealer that they sold you a service contract that wasn’t being honored and that you want them to do the right things. Ask to speak with the general manager of the dealership if they are unable or unwilling to help.
Start at the beginning when you call the general manager. Explain the problem with your car, and how it was covered by the shop. Explain that your claim was denied and that you have to resubmit. List all the numbers you called and who you spoke to. The general manager should know that you called the finance manager who sold the service agreement and the number they advised you to call.
- Talking to the dealership GM will help you achieve three things:
- You want them not to feel like you have been dragged through the mud.
- Ask them if you believe they can make things right. If they answer yes, that’s great! If they answer yes, great!
Ask the GM if they are able to give you a full reimbursement of your service agreement, unless the repair is covered by the warranty