Automotive Service Contract and Extended Warranty

Automotive Service Contract & Extended Warranty

AmTrust Warranty & Specialty Risk is one of the leading underwriters of insurance for extended warranties, service contracts and protection products within the automotive space. Adaptability in program design paired with our 25+ years of experience ensures that AmTrust Warranty & Specialty Risk is always ready to deliver and take advantage of market disruptions, new technologies and emerging opportunities. Whether offering coverage on individual vehicles or fleets, for Internal Combustion Engine (ICE) or Electric Vehicle (EV), we partner with the industry’s largest manufacturers and administrators to deliver turn-key and tailored programs. 


What is an Automotive Extended Warranty or Vehicle Service Contract?

At the time of purchase, most new cars come with a warranty from the manufacturer, but those warranties often expire after a few years. Extended auto warranties or vehicle service contracts offer coverage for certain repairs. Additionally, ancillary products provide protection for out-of-pocket costs associated with maintaining a vehicle, such as dent and ding repair, tire and wheel damage, key fob replacement, lease wear and tear coverage, theft protection, etc. 

Automotive Coverages

  • Vehicle Service Contracts (ICE and EV) 
  • Guaranteed Asset Protection (GAP) 
  • Mechanical Breakdown Insurance 
  • EV Battery and Wall Charger 
  • Lease Wear and Tear  
  • Lifetime Warranties*
  • Pre-Paid Maintenance 
  • Dent and Ding (Paintless Dent Protection- PDR) 
  • Vehicle Theft Protection (Etch) 
  • Appearance Protection (Paint and Fabric) 
  • Tire and/or Wheel Road Hazards Protection 
  • Windshield Protection 
  • Key/Remote Replacement  
*Capped coverage
Frequently Asked Questions About Automotive Extended Warranty and Service Contract
Is an automotive extended warranty necessary?
Automotive extended warranty and service contract products offer additional protection for out-of-pocket burdens associated with maintaining a vehicle. Unexpected breakdowns and complicated technologies can lead to large repair or replacement costs. Extended warranty coverages are designed to help minimize the financial impact of these events and get you back on the road.  
How do ancillary coverages work?

Ancillary coverages help cover products associated with owning and operating a car. Some of these ancillary products include coverage for: 

  • Dent and Ding Repair: In the case of a shopping cart dent, or a minor run-in with the garage door, a baseball, and so on, products such as Dent and Ding Repair help cover the cost of fixing the dent on the body of the vehicle. 

  • Tire and Wheel: Many people mistakenly think the manufacturer's warranty covers the tires and wheels of their vehicle. 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've purchased tire and wheel coverage. 

  • Theft Protection: Car thieves continually devise new and sophisticated ways of stealing vehicles, such as acquiring access to smart keys, switching vehicle identification numbers and even stealing identities to secure loans for more expensive vehicles. Products to safeguard your vehicle include theft deterrents or vehicle recovery systems to prevent thieves from stealing your car. If they fail to prevent this from happening, coverage will be afforded to you for the cost of your primary insurance deductible, as well as help towards your new car costs. 

  • Windshield Chips and Cracks: Did you know a damaged windshield might also interfere with the airbag's 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 in the ancillary suite of products. 

  • Key/Key Fob Replacement: Almost all new automobiles come with key fobs, 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. Some ancillary offerings will cover 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 them 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 appearance protection products can help preserve the pristineness of your new car, inside and out, and offer remedies to resolve the messes they fail to protect. 

How much do automotive service contracts and extended warranty coverages cost?

The cost of an automotive extended warranty varies depending on what is covered and where and how it is purchased. The top-tier coverage for extended warranties or vehicle service contracts covers a wide range of breakdowns and will typically have the most value. Engine-only coverages are available at a lower price point. Generally, the cost is directly related to the quality of coverage included in the plan.  

Is Guaranteed Asset Protection (GAP) necessary?

New car owners should consider Guaranteed Asset Protection (GAP) to help cover the costs if they experience a total loss of their vehicle. GAP ensures that vehicle owners won’t incur a loss if the vehicle is damaged beyond repair or stolen and never recovered by paying the difference between the insurance settlement amount and the loan or lease balance.  

How much does GAP cost?

If you buy GAP at the time of purchasing a new or used car at a dealership, a flat fee for the coverage and ongoing interest will be added to your vehicle financing. Your interest GAP coverage rates vary based on the term of your loan and the ratio of the loan amount to the value of the vehicle.   

Where can I buy an auto extended warranty?

Auto extended warranties are offered to new and used car buyers and leaseholders at the time of or near the purchase date. The coverage is available for purchase typically from three sources:  

  • Car dealership at time of purchase  

  • A direct-to-consumer company that sells auto extended warranty after the vehicle has been purchased  

  • Affinity groups that offer benefits to their members. i.e., Credit Union, Bank, Credit Card 

When should an automotive extended warranty be purchased?
Before car buyers drive their new or used vehicle off the dealership lot, the salesperson may offer a vehicle service contract that goes 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. This coverage is recommended to be purchased either at the time of the vehicle purchase or before the manufacturer’s warranty expires.  
How long does an automotive manufacturer warranty last?

The car factory warranty length depends on the car manufacturer. The usual manufacturer bumper-to-bumper warranties on new cars last between 3 years/36,000 miles and 5 years/60,000 miles.  

A vehicle service contract or extended warranty, in some cases, can go beyond the manufacturer's warranty for coverage up to 250,000 miles. 

Are there any exclusions or limitations to automotive extended warranty coverage?
Every type of warranty coverage has exclusions, so it is important to thoroughly read the terms and conditions. For example, manufacturer and extended warranties do not cover normal wear and tear or damage from the lack of regular maintenance or due to an accident. Extended automotive warranties usually do not cover damage from natural disasters, lightning strikes or hail damage. They also will not cover modifications made to the vehicle, improper installation or some pre-existing conditions. 

Contact AmTrust Warranty & Specialty Risk for Automotive Service Contracts and Extended Warranties

To learn more about our coverage options, please contact AmTrust Warranty & Specialty Risk today.