Extended warranties
An extended warranty is a service contract that provides repair or replacement coverage for specific products, such as automobiles and electronics, beyond the manufacturer’s standard warranty period. Consumer Reports states that extended warranties generally cost between $1,000 and $3,000 for cars in the U.S.
Coverage often includes mechanical breakdowns, with exclusions for wear-and-tear items like brake pads and tires. Most plans require a deductible per claim, typically ranging from $50 to $200 according to J.D.
Power data. Major retailers such as Best Buy and Walmart offer extended warranties on appliances and gadgets, with average coverage lasting two to five years post-purchase, per Your Insurance Info.
Extended auto warranties do not cover routine maintenance services such as oil changes or tire rotations. Data from the Federal Trade Commission indicates that less than 55% of extended warranty purchasers ever file a claim.
Many contracts prohibit repairs at non-authorized service centers; for example, most auto warranties restrict consumers to networked repair shops. Cancellation policies commonly allow prorated refunds if canceled before expiration, with administrative fees averaging $25–$75.
The National Association of Insurance Commissioners regulates certain types of extended warranties in some states but classifies others as service contracts exempt from insurance rules.
Does insurance cover mechanical breakdowns?
Yes, insurance typically covers mechanical breakdowns. Most auto insurance policies offer coverage for mechanical breakdowns as part of the comprehensive coverage portion of the policy. Depending on the company, this may cover repairs due to normal wear and tear or only unexpected mechanical failures. Some insurers even offer extended warranties that can be added onto…
Does car insurance cover paint jobs?
No, car insurance generally does not cover paint jobs. This is because auto paint work is considered to be a cosmetic expense and isn’t necessary for the performance of the vehicle or needed to repair any damage caused by an accident. Some extended warranties may cover this type of expense, but they are typically optional…
Can I get insurance at the dealership?
Yes, you can get insurance at the dealership. Many dealerships offer various types of insurance and other products such as extended warranties, gap coverage, and tire-and-wheel packages to customers who purchase a new or used vehicle from them. These may be offered either directly through the dealership or through a third-party provider that works with…
Will insurance cover engine failure?
Insurance typically does not cover engine failure unless the policy specifically states that it does. However, coverage for certain parts of an engine may be included in a policy if certain conditions are met. For example, some policies provide coverage for repairs or replacement of parts such as spark plugs, filters, and belts to keep…
See also Extended warranty.