Extended Auto Warranties Ancillary Insurance Products

Topics: specialty risk

Summary: Automotive warranty ancillary insurance products offer additional protection for out of pocket costs associated with maintaining a vehicle. Find out what benefits ancillary insurance coverage provides to new car buyers.

It's every vehicle owner's worst nightmare: You exit the grocery store, and as you approach your car, you notice a shopping cart suspiciously close to your passenger side. Upon further inspection, your heart sinks as you realize the cart had somehow collided with the car, leaving a dime-sized dent and a large scratch down the side. Even worse, you know you'll have to pay out of pocket for this type of repair.

Unless, however, you'd purchased an extended car warranty, also known as a vehicle service contract (VSC), that included ancillary insurance products. Ancillary coverage (ANC) helps cover products associated with owning and operating a car, such as dent and ding repair, tire and wheel damage, key fob replacement, lease wear and tear coverage, theft protection and more.

A Closer Look at Ancillary Insurance Coverage for Vehicles

Before car buyers drive their new or used vehicle off the dealership lot, the salesperson may offer an extended auto warranty that provides coverage above and beyond the manufacturer's warranty. In addition to the extended car warranty, several ancillary products extend coverage to provide helpful benefits to consumers to ensure their out of pocket costs for repairs are kept to a minimum.

Some of these ancillary insurance products include coverage for:

Dent and Ding Repair

In the case of the shopping cart dent above, or perhaps a minor run-in with the garage door, a baseball, and so on, ancillary insurance would cover the cost of fixing the dent, including any chips, cracks or other damage to the body of the vehicle.

Tire and Wheel

Many people mistakenly think the manufacturer's warranty covers their tires and wheels. However, when they get their first flat tire, they quickly learn otherwise. While roadside assistance offered by many car companies will assist with switching out the bad tire or towing the car to a repair shop, the actual cost of the repair or replacement comes right out of the owner's pocket – unless, of course, they'd purchased tire and wheel coverage as part of their extended warranty.

Theft Protection

According to the Insurance Information Institute (III), in 2019, almost 722,000 vehicles were stolen in the United States, costing around $6.4 billion. Car thieves continually devise new and sophisticated ways of stealing vehicles, too, such as acquiring access to smart keys, switching vehicle identification numbers and even stealing identities to secure loans for more expensive vehicles. Some ancillary insurance products include theft deterrent or vehicle recovery systems to prevent thieves from stealing your car.

Windshield Chips and Cracks

Did you know a damaged windshield might also interfere with the airbag performance and threaten your overall safety on the road? Even the smallest crack can lead to the destruction of a car's windshield over time. It's vital to repair a cracked or chipped windshield as soon as possible, and it's one of the coverages provided by ancillary insurance.

Key/Key Fob Replacement

Car keys for new vehicles are no longer just simple keys that unlock the doors and start the ignition. While they still do those tasks, almost all new automobiles come with key fobs, which are devices programmed to communicate with all the car's systems, including the ignition, doors and trunk. Many also include a panic button for emergencies. If lost or misplaced, these high-tech devices can be costly to replace. Ancillary insurance can be extended to include the cost of replacing the key fob.

Appearance Protection

People want to keep their new vehicles looking as shiny and clean as the day they drove it off the car lot. However, outdoor factors like inclement weather, tree sap, bird droppings and other elements can damage the exterior. At the same time, discoloration from the sun's rays or food and beverage stains can ruin the interior. Ancillary insurance coverage can include several appearance protection products that can help preserve the pristineness of your new car, inside and out.

Automotive Extended Warranties from AmTrust Specialty Risk

AmTrust Specialty Risk has been customizing innovative insurance solutions for over 20 years as one of the nation's largest warranty writers. Our coverage team works directly with the industry's largest manufacturers and administrators around the world to create vehicle service contracts, Guaranteed Asset Protection coverage and ancillary protection products for the automotive, RV, motorcycle, marine and powersports industries. For more information about partnering with AmTrust Specialty Risk, please contact us today.

This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.

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