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Extended Warranty Administrators

An extended warranty administrator is the company that has the responsibility for paying your auto claims. Often the administrator is not the insurer who covers your claims and it is generally wise to purchase your extended warranty from the administrator direct. In this way you can usually rest assured that their warranty plan is re-insured with an “A” rated insurer. You are allowed to check out their facts and figures and some people even go so far as to look into their claims handling history. This is a wise move!

The administrator of an extended warranty plan should have a claims reserve account that is insured with an “A” rated company or a well run RRG or Risk Retention Group. An extended warranty is not categorically considered to be insurance, although we often relate to it that way, so the financial strength of the extended auto warranty administrator is vital.

Ideally the claims reserve account is supposed to be insured as this is what protects the extended warranty owner if the administrator goes defunct. Many warranty administrators do just that, they come and go, leaving their clients with a warranty product that is worthless and no insured claims reserve account. This scenario has to be avoided like the plague. Check if the extended warranty product you like has an insured claims reserve account and even better if the account is also reinsured, before you decided to purchase their product.

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