AmTrust 2020
Extended Auto Warranty Advisor

Consumers Shift Gears and Accelerate Extended Warranty Growth

Extended Warranties Grow In Popularity As Claim Payouts Increase

AmTrust examined over 2.4M auto warranty claims totaling ~$1.5B from 2015-2019 across all manufacturers as auto warranty claims continue to rise.

Guaranteed Asset Protection (GAP) claim payouts have risen by

%

Vehicle Service Contracts (VSC) claim payouts have risen by

%

COVID-19 Impact

2020 saw a major shift in driving habits. Use of public transportation decreased while short getaway trips became more popular.

“Consumer demand for automobiles, both new and used, has quickly accelerated since May. We’ve also seen an increase in demand for a variety of extended warranty products that enable consumers to protect their investments.”

Bruce Saulnier

President of AmTrust Specialty Risk U.S.

Economic Concerns Make EXTENDED AUTO WARRANTIES More Desirable

Consumers hold on to vehicles longer and are more likely to purchase used vehicles

As vehicles age, the likelihood of an expensive repair increases

Having an extended warranty can protect consumers from having to pay a huge bill out of pocket

Gap Protection

Are Consumers Minding the Gap?

For many consumers purchasing new cars, GAP is crucial to protect their investment from the moment they drive off the lot. Drivers are getting more value out of GAP, with the average five-year claim payouts continually increasing.

Cars Depreciate Faster and Don't Hold Value Like Trucks

Cars are % more likely than trucks to file a GAP claim

Cars

Trucks / Vans / SUVs

But Trucks / Vans / SUVs Have Higher Claim Payouts

Cars

$3,285

in 2019

up 18% from 2015

Trucks / Vans / Suvs

$3,437

in 2019

up 23% from 2015

GAP: Differences In Manufacturers*

Asian Manufacturers of Trucks/Vans/SUVs See Highest Five-Year Growth in Average Claim Payouts

Domestic

11%

Cars

10%

Trucks/Vans/SUVs

Asian

16%

Cars

32%

Trucks/Vans/SUVs

European

18%

Cars

19%

Trucks/Vans/SUVs

*percentages reflect the increase in average claim payouts from 2015-2019

Appearance Protection

Keeping Up Appearances

Dents, dings and spills can ruin your vehicle’s interior and exterior appearance. Many consumers find comfort in purchasing additional coverage. Claim payouts on these coverages continue to rise by an average of 30%, helping consumers keep their vehicles looking good while avoiding repair costs.

Looking Good In Your Neighborhood

Average Claim Payouts

across all regions over a 5-year average was

$293

Midwest

$310
in 2019
94%
5-year gain

Northeast

$317
in 2019
57%
5-year gain

West

$353
in 2019
32%
5-year gain

South

$349
in 2019
41%
5-year gain

CRACKING THE CODE OF WINDSHIELD PROTECTION

Average Claim Payouts

across all regions over a 5-year average was

$438

Midwest

$546

in 2019

+79%

5-year gain

West

$550

in 2019

+70%

5-year gain

Northeast

$368

in 2019

+38%

5-year gain

South

$529

in 2019

+62%

5-year gain

Asian Vehicles See Largest Increase In Windshield Protection Claim Payouts

Domestic
2015 5-year gain
+47% 2019
Asian
2015
5-year gain
+82%
2019
European
2015
5-year gain
+45%
2019

TIRE AND WHEEL PROTECTION

Potholes, road repairs and lousy weather stall drivers in the Northeast and Midwest, where we see the highest average claim payouts for Tire and Wheel Protection.

Average Claim Payouts

across all regions the 5-year average was

$280

Northeast

$321

Midwest

$227

South

$203

West

$203

LABOR AND PARTS COSTS DRIVE HIGHER EUROPEAN AVERAGE CLAIM PAYOUTS FOR APPEARANCE PROTECTION

Domestic

$207

Asian

$149

European

$377

Mechanical Breakdown

Technology & Vehicle Age Fuels Claim Payouts

As the technology in vehicles continues to grow, more complex components can break down, requiring expensive repairs. Vehicle Service Contracts give consumers the comfort of knowing that if something does go wrong, they won’t be stuck with a huge out of pocket bill. As vehicles age, the likelihood of a major component break down increases, causing the average claim payouts cost of used cars to exceed new vehicles.

New Vehicles Outshine Used With Less Expensive Repairs

New Cars

$947*

in 2019

up 22% from 2015

Used Cars

$1,169*

in 2019

up 17% from 2015

*Average Claim Payouts

Learn More About AmTrust's Extended Warranty Offerings


www.amtrustfinancial.com/specialty-risk

contactwarranty@amtrustgroup.com