Car Service Contract Claim Coverage 101
A vehicle service contract (VSC) is a plan that protects consumers from expensive mechanical breakdowns or failures. Plans cover car repair costs for covered mechanical repairs - including replacement parts, labor, and sales tax.
Auto protection coverage levels
Car protection plans vary in coverage and benefits based on the type and place of purchase. Plans often cover the cost of expensive auto repairs, such as engine repair or replacement.
Coverage for car repairs depends on the terms and conditions of the consumer's plan. Extra plan coverage may also be available - including emergency roadside assistance, rental car reimbursement, or trip interruption reimbursement.
Vehicle Service Contract, Extended Auto Warranty, Auto Warranty
What's the difference?
A vehicle service contract is commonly but incorrectly referred to as an “extended auto warranty” or "auto warranty". All provide peace of mind to the consumer for costly repairs.
The difference among the three is subtle but important:
- Vehicle service contract: Car protection that can be purchased separately and at any time
- Extended auto warranty: Plan offered by car dealers to extend the factory warranty
- Auto warranty: Provided by motor vehicle manufacturers and included with the original vehicle purchase
What's the same?
A similarity among the three is also important:
Much like a manufacturer’s auto warranty or an extended auto warranty available through car dealers:
- Vehicle component coverage is contract-specific
- Routine maintenance of the vehicle must be properly and regularly performed for coverage to apply
- Coverage excludes benefits for damage caused by a lack of recommended maintenance