You buy an aftermarket automobile warranty to protect yourself when your car breaks down, right? You want to avoid the stress of unexpected mechanical failures that can really eat away at your finances and your peace of mind. So it can be very frustrating to hear the words “warranty claim denied”. You pay the money for an extended warranty or vehicle protection plan and then you still have to cover repairs out-of-pocket? How can that be?

Well, an aftermarket automobile warranty plan is a contract – an agreement between you and the warranty provider. And, like every contract, there are terms and conditions. If you don’t comply with these, your claim may be denied. Sometimes it’s insufficient coverage. Sometimes it’s a misunderstanding about your responsibilities. Sometimes it’s a less than reputable warranty provider that is more interested in taking your money than fixing your car.

However, even with the most reliable company and the best coverage available, there could still be times when your claim is rejected. When working with highly rated providers, it doesn’t happen very often, but it is always good to know why or when an aftermarket automobile warranty claim may be denied so you can make every effort to make sure it doesn’t happen to you.

Your aftermarket automobile warranty claim may be denied if…

1. The part or component is not covered under the contract. There are different levels or tiers of coverage, each coming with its own set of exclusions. If you purchased a limited aftermarket automobile warranty policy to save money, there will be a longer list of things that are not covered by your package. Typically, the more comprehensive the coverage, the more you will pay for your plan. However, this isn’t always a bad thing, especially if you are faced with expensive engine or transmission failure repairs.

2. There is suspicion of misuse or abuse. Many warranties have clauses stipulating that only repairs resulting from ‘normal’, ‘regular’, or ‘expected’ use will be covered. So, basically, anything that goes beyond the normal operation of the vehicle could be grounds for a claim denial.

Racing, heavy towing, overloading, off-roading, or using dirty/improper fluids are just some of the things that may be considered inappropriate. Depending on your warranty provider, this category can be pretty broad and include quite a few grey areas. For example, even a vehicle that is meant for off-roading could be denied if the mechanic believes that the problem was caused by use exceeding the car’s capabilities. In some cases, even if abuse cannot be proven, a claim may be denied because a mechanic thinks that a vehicle shows signs of possible misuse.

3. Aftermarket parts are used or modifications are made to the vehicle. This is another one of those fuzzy areas, and the specific rules will vary depending on your warranty company. Technically, your aftermarket automobile warranty cannot be voided or denied just because you made some modifications or used aftermarket parts. However, if there is proof that the aftermarket part or a specific modification caused the problem, then your claim may be rejected. In most cases, a relationship must be established – a cause and effect must be proven. If the aftermarket part had nothing to do with the needed repairs, then there should be no reason for your claim to be denied.

Also, keep in mind that certain modifications could raise the suspicions of both your mechanic and warranty provider. For example, high-performance components may imply that you race your vehicle or oversized tires may indicate that you like to drive on rugged, off-road terrain.

4. There are signs of damage caused by natural disasters or environmental factors. Most extended warranties and/or vehicle protection plans will not cover damage or repairs resulting from things like floods, fires, or earthquakes.

5. Your vehicle is salvaged or branded. If the vehicle was “written off” by an insurance company because it was in an accident or damaged due to a natural disaster your warranty will automatically become void. Sometimes it might not be your fault. You could unknowingly buy a salvaged or branded car, but if you purchase a warranty it may end up being a waste of money. To avoid having your warranty claim denied, do a title check or get a vehicle history report before buying any vehicle.

6. The odometer has been altered. Do a vehicle history check and make sure that there are no inconsistencies in mileage. Most warranties have mileage limits so if a mechanic suspects that the odometer has been tampered with, your claim may be denied.

7. Unnecessary repairs are made. A lot of mechanics will try to convince you to do repairs that may not be needed. Women are especially vulnerable to this scheme since many mechanics assume that we don’t know anything about cars. However, completing unnecessary repairs may end up costing you a lot of money.

Many shops will use the reasoning that if the left front strut broke then the right front strut is probably on the way out too, so you should change both at the same time. There may be some truth to this assumption, but keep in mind that most aftermarket automobile warranty companies will only pay to replace parts that have failed – not ones that might fail in the future. If you agree to have the right front strut replaced, then be prepared to pay for it out-of-pocket, just in case that part of your claim is denied.

8. You do not receive authorization for the repair. Most warranty companies and VPP providers require that the repair shop submit an estimate for authorization before beginning any work on your vehicle. If you allow the mechanics to complete repairs before receiving approval from the warranty company/provider, you may end up having to pay the bill yourself. Don’t allow any work to be done on your car until the warranty company has agreed to pay for the repairs.

9. The repair shop overcharges. This is one of the main reasons why authorization is so important. Some garages will “pad” their bills when they know that an insurance company or warranty provider will be paying for the repairs. But, most plan administrators have some idea of what common repairs should cost, and if they suspect that they are being excessively overcharged, they may deny full payment of the claim. In this case, you could be left owing the difference.

10. You use a non-reputable company. Some companies are quick to take your money but then will fight you on every little claim. Trying to get them to honor their end of the contract can be exhausting. Before buying an aftermarket automobile warranty, research the company to make sure that they are reliable, well established, and in good standing with the Better Business Bureau.

11. There are signs of neglect or lack of maintenance. Many contracts stipulate that you do regular service and maintenance such as oil changes and filters. They may also require that this work is done at a licensed shop (so, your dad’s garage or your best friend’s driveway doesn’t count) and that you keep records and receipts as proof that your vehicle was properly maintained. Even if you have all the work done by a professional, your claim can still be denied if you can’t produce your records, so be sure to keep them in a safe place. You may not have to show them every time you take your vehicle in for repairs, but if a mechanic suspects that neglect may be the cause of a specific problem, you may be asked to show proof of maintenance. So, if the coolant is really low or the oil looks dirty and black, be prepared to pull out those receipts.

12. The problem being repaired is a pre-existing condition. You cannot get an aftermarket automobile warranty to pay for a problem that you already have. If the part or component failed or was failing before you purchased the warranty it will not be covered. Some warranty companies will require a vehicle inspection before issuing the contract, but others do not. If you want to protect yourself, you could have your own inspection done to prove that the vehicle was looked at prior to purchasing the warranty and that you were not aware of any pre-existing conditions.

13. There was additional damage from continued driving. If you keep driving the car after you know it needs to be repaired, you do so at your own risk. Any additional damage caused may not be covered by your aftermarket automobile warranty. When I took my car in for an oil change last week the mechanic was behind schedule because he was replacing an engine in another vehicle. Apparently, the owner continued to drive it with a leaking heater core and it destroyed the engine. In this case, a warranty provider may still agree to cover the cost of replacing the heater core, but any claim for the engine work would be denied. So, if your car overheats or your oil pressure gauge drops, it probably isn’t a good idea to continue driving the vehicle.

To ensure that your claim will not be denied you should:

  1. Complete all recommended service and maintenance.
  2. Keep a copy of all receipts for any service, maintenance, and repairs.
  3. Have service and maintenance done at a licensed garage. If your contract allows you to do your own oil changes, keep the receipts for the oil and filter and document the date in a log book.
  4. Read your warranty or vehicle service contract carefully, including the fine print. It is important that you know what is included, what is excluded, and what your responsibilities are as the vehicle owner.
  5. Research warranty companies before you purchase a plan. Make sure that you buy your coverage from a reputable provider such as autopom! that is well established and in good standing with the BBB.
  6. Do a history check on any vehicle you are thinking about buying before you hand over the cash. Make sure that it is not salvaged, branded, or stolen.
  7. Drive your car responsibly and avoid any misuse or abuse. If you own a vehicle that is meant for off-roading, make sure you understand the coverage limits and what circumstances may void your contract.
  8. Fix any issues as soon as possible to avoid causing additional problems that may not be covered.
  9. Make sure you understand the correct claims process for your warranty provider and always get authorization or approval before allowing any repairs to be done on your vehicle.

With the right coverage, an aftermarket automobile warranty can be a great investment. By understanding the terms of your contract and following the above tips, you can avoid the financial stress of unexpected breakdowns and enjoy the peace of mind knowing that the right coverage is in place whenever you need it.