A Rated: An industry term used as a business rating reference. "A Rated" is the highest rating a business can receive.
Administrator: A company that authorizes and pays the repair service provider for covered repair work to your vehicle. The administrator works with the repair facility to insure your claim is repaired properly according to your coverage plan.
A. M. Best & Co: A.M. Best Company is the leading source for insurance company analysis and ratings. It offers thorough analysis on more than 6,000 insurance companies. A.M. Best & Co. is over 100 years old and their rating system has become the industry's standard measurement of an insurance company's financial condition.
Authorization: The official approval issued by the administrator before repairs are started.
BBB: The Better Business Bureau (BBB) is an independent monitor of a company's complaint handling record. A company that participates in the BBB Online Reliability Program agrees to abide by the BBB Code of Online Business Practices, and agrees to dispute resolution with the BBB. Most of the companies who participate in this program value their standing and tend to do a better job at handling complaints.
Bumper-to-Bumper: Otherwise known as an "exclusionary" policy. This is the most comprehensive extended warranty available. It covers so many parts and components of your vehicle that the policy only lists the items that are not covered under the warranty. If a particular part or component is not listed it is covered under a bumper-to-bumper policy.
Cancellation: A cancellation clause allows the warranty holder to cancel the policy and receive monies back. Typical cancellation clauses allow a money back guarantee within 30 days of the start of coverage providing no claims have been filed. After 30 days a cancellation can only occur in the event that the Vehicle is declared a "total loss" by an Insurance company. A "total loss" refund is usually prorated based on time and mileage that the policy was in force.
Corrosion Warranty: A corrosion warranty is typically a manufacturer's warranty that covers rust and perforation on the metal body of the vehicle.
Deductible: The stated amount in your warranty policy that you must pay the repair facility for each policy covered repair done to your vehicle. The warranty company pays the balance of the covered repair. Typical deductibles range from $0 to $200 and the lower deductibles are usually plan options you can purchase for a small surcharge.
Diagnostics: The exploration the repair facility performs to your vehicle in order to determine the repairs needed for your vehicle to be operable properly. Warranty plans typically do not cover diagnostics.
Eligibility: The determination of coverage available on a particular vehicle based on specific characteristics and usage. Eligibility is typically based on age, mileage, make and model of the vehicle including components such as four-wheel-drive, turbo/super chargers, number of cylinders. History and usage are also taken into consideration, for example a salvaged title or commercial use of the vehicle. Each warranty plan has its own specific set of eligibility requirements.
Exclusionary Policy: Also known as an "Bumper-to-Bumper" policy. This is the most comprehensive extended warranty available. It covers so many parts and components of your vehicle that the policy only lists the items that are not covered under the warranty. If a particular part or component is not listed it is covered under an exclusionary policy.
Extended Warranty: A policy that covers a vehicle against mechanical failures and breakdowns. Also know as a Vehicle Service Agreement, Extended Service Agreement, or Mechanical Breakdown Agreement. This type of warranty will pay for your vehicle's covered repairs based on the terms of the warranty agreement.
In-Service Date: The date the Vehicle was purchased by the original owner and driven or the date the Vehicle was placed in use for rental, demonstration, or other purposes.
Inclusionary Policy: Also known as a "Stated Component Coverage" Policy. Inclusionary policies list all of the vehicle's parts and components that are covered by the warranty. If the component or part is not listed then it is not covered.
Inspection: The examination or review of your vehicle's components by a certified mechanic. A vehicle will pass a pre-warranty inspection only after the mechanic attests to the proper working condition of all components of your vehicle. Inspections are required by some warranty plans for higher mileage or older vehicles.
Insurer: Also known as re-insurers, the insurance company that issues a policy and guarantees the obligations and performance of the warranty plan administrator. Most reputable auto warranty companies contract with, and are backed by, another insurance company to insure payment of policy claims should the original warranty company default.
Make: The Make of your vehicle is the vehicle's manufacturer.
Manufacturer: The manufacturer is the company that built your vehicle.
Manufacturer's Recommended Maintenance Guidelines:
This is the routine maintenance that is recommended
by the manufacturer of your vehicle. These are
the manufacturer's guidelines to keep your vehicle
in satisfactory working order. Typical maintenance
would include changing the engine oil, checking
proper fluid levels, tire rotations, and replacement
of certain parts at specific mileage intervals.
Not following the manufacturer's recommended maintenance
schedule may void your warranty agreement.
Manufacturer's Warranty: This is the vehicle's
manufacturers stated warranty to repair your vehicle
for a specified period of time and/or mileage.
Manufacturer's warranties typically are not "all
inclusive" and cover only specific components
of your vehicle. Review your manufacturer's warranty
agreement for coverage details and specifics.
Model: The model is the specific type of
vehicle that was made by a particular manufacturer.
New Vehicle: As applied to extended warranties,
the term new vehicle refers to a vehicle that
is still covered by the original manufacturer's
"Bumper To Bumper" warranty. This term does not
mean that the vehicle was purchased "brand new"
or you are the first owner, simply that the vehicle
is still covered by the original manufacturer's
bumper-to-bumper warranty.
Odometer Miles: The actual miles the vehicle
has traveled as displayed on the vehicle's odometer.
Failure of the odometer or removal will void a
warranty agreement unless the replacement of the
new functioning odometer has been certified by
the repair facility and documented to the warranty
company.
Plan Expiration: This is the date, odometer
mileage, or additional mileage that policy will
no longer be in effect. For example, a 3 year
/ 75,000 mile warranty will expire 3 years from
the date that you enroll your vehicle or when
the odometer reads 75,000 miles. Another example
would be 24 month / 24,000 miles which would expire
24 months or 24,000 miles after you enroll your
vehicle. The specific plan expiration is stated
in the warranty agreement.
Plan Mileage: The total mileage that the
warranty policy covers your vehicle. Typically
this is the mileage on the vehicle's odometer,
but can also be additional mileage from the beginning
of coverage, or unlimited mileage based on the
warranty plan coverage expiration statement.
Plan Term: The amount of time in years
or months and/or the total mileage that your extended
warranty policy will cover your vehicle.
Power Train Coverage: This is a limited
warranty that only covers certain parts of your
vehicle's engine, transmission, and drive train.
Product Warranty: Product warranties generally
cover fewer parts than a service contract or mechanical
breakdown insurance policy. A product warranty
is only allowed by law to cover parts that are
in direct contact with the product or parts that
are mechanically connected to those parts. For
example, a manufacturer of an engine oil may warrant
that by using their product the engine will not
break. However, the maker of the oil is not allowed
to warrant that the car horn won't break, since
a car horn is not in direct contact with oil and
is not mechanically connected to a part in contact
with oil.
A product warranty may not be sold for a separate price and must be provided free of charge. Product warranties usually limit how much you can recover for parts that need repairs.
Finally, service contracts must be guaranteed by an insurance company. Product warranties do not have to be guaranteed by an insurance company.
Ratings: Ratings are independent benchmarks
for determining a company's financial strength.
(see A.M. Best & Co. and A Rated.)
Re-insurer: Also known as a Reinsurance
Company. An insurance company that issues a policy
to guarantee, or re-insure, the obligations of
the warranty provider.
Rental Benefit: The amount you will be
reimbursed for actual expenses incurred for substitute
transportation while your vehicle is being repaired.
Rental benefits are only reimbursed if the breakdown
was caused by a covered part or component. Certain
exclusions are defined in the warranty plan that
typically cover benefits if labor exceeds a specific
number of hours, or limit reimbursements to a
specific dollar amount per day, or for a maximum
number of days. Exclusions can also be defined
as unavailability of parts, shipping, or repair
facility schedules.
Repair Facility: An authorized licensed
repair facility as described in your specific
warranty plan. This includes, but is not limited
to your dealership, local mechanic, or national
repair center.
Roadside Assistance: An additional warranty
plan benefits that provide roadside assistance
such as towing, battery jump, flat tire repair,
fuel and fluid delivery, or emergency lock out.
These benefits will include a toll free telephone
number to call for service 24 hours a day 365
days a year.
Stated Component Coverage: Also known as
an "Inclusionary" policy. Stated Component policies
list the vehicle's parts and components that are
covered by the warranty. If the component or part
is not listed then it is not covered.
Transferability: A vehicle with a transferable
warranty can have the warranty transferred to
the new owner if the vehicle is sold privately.
Sometimes a small fee is required.
Travel Interruption Benefits: Reimbursement for lodging and restaurant expenses due to mechanical breakdown of your vehicle during a trip. Travel is typically defined as over 100 miles from your home.
Used Vehicle: As applied to vehicle warranties,
the term used vehicle means a vehicle whose original
manufacturer's bumper-to-bumper warranty has expired.
This term does not mean that the vehicle was not
purchased "brand new" or you are not first owner,
simply that the vehicle's original manufacturer's
bumper-to-bumper warranty has expired.
Vehicle Identification Number (VIN): Each
vehicle has a unique Vehicle Identification Number
established by the manufacturer which codes the
individual characteristics at the time of manufacture
of a particular vehicle. The VIN number can be
found in several places, the most common being:
1. The vehicle title
2. The vehicle registration
3. The vehicle insurance card
4. A plaque on the driver-side dashboard of the vehicle
Wear and Tear: Additional warranty coverage
for parts that have worn out beyond what the manufacturer
terms "normal tolerances, as opposed to simply
breaking. This is a much broader coverage of parts
than a standard warranty. Normal maintenance items
are not covered, for example brake pads/shoes,
rotors/drums, clutch plates, and wiper blades.
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