Turns out that, if the specific part or parts that fail are not listed under the fine print of a policy like the one I had, a claim will be denied. Only the parts least likely to fail are covered.
February 3, 2011 — Consider mine to be a voice of experience, folks. Take my advice. When your new car warranty runs out, start putting some money away for the inevitable breakdown, trade your old car in for a new car, or purchase a warranty extension from a trusted, local dealership. After all, mechanical things aren’t made to last forever. Do not … I repeat… do not purchase a third-party power train insurance policy.
I bought such a policy last year, a so-called “gold” policy through Nationwide Auto Protection for my five year-old Dodge Magnum. The salesman made it sound like everything having anything to do with the power train would be fully covered. So I figured, with the premiums for the insurance being much cheaper than payments for a new car, this would be a smart buy. I could take my time considering what to buy next, maybe even waiting a year or two to see how the new electrics like Chevrolet’s Volt perform. Wrong decision.
While hundreds of miles away from home recently, I had transmission problems. Long story made short, it took over a week to get my claim approved, and then only after a sympathetic service representative was able to convince an insurance inspector that the failure was because of a “covered” part in the trans- mission. Turns out that, if the specific part or parts that fail are not listed under the fine print of a policy like the one I had, a claim will be denied. Only the parts least likely to fail are covered. To top that off, I had to agree to pay the transmission teardown expenses in the event that my claim would be denied. So, I had to gamble around $700 in labor costs that the policy’s inspector would rule in my favor. Fortunately, I had recently had the transmission serviced too and had proof of this. Otherwise, the claim would have been denied for this reason also.
Had I not had a relative to stay with while all this took place, it would have cost me many times more to get the repairs done using the insurance than it would have just paying for it out-of-pocket. Good thing I am retired now too and didn’t need to get back to a job.
Do not walk away from this company or other such third-party insurance companies — run!
I invite your comments on this post, whether pro or con.