Many people have heard of, or purchased, an extended auto warranty, but some of them don't know exactly how they work. What do you do if you vehicle needs repairs? What are the out of pocket cost? These are both common questions that consumers have. I like to compare extended warranties to car insurance, because that's basically how a consumer views them; however they truly are assurance products that protect you from the high cost of repair bills. Everyone has car insurance. Well, a vehicle protection plan, or extended warranty, works much like car insurance. With car insurance, if your vehicle is in an accident, you file a claim with your insurance company, have an adjuster look at it, take it to a body shop for repairs, and all you pay is the deductible if the accident was your fault. Extended warranties work sort of the same way. If your vehicle needs a mechanical repair all you have to do is take it to the repair shop. Unlike car insurance, most of the time, you don't have to make a repair claim yourself. The repair shop will do it for you. Depending upon the protection plan your purchased, there may be a deductible that you have to pay, but the warranty company will pay for the remainder of the repair bill. Also, just like some car insurance policies, vehicle protection plans offer benefits such as a rental car, trip interruption, and roadside assistance. So, an extended warranty is similiar to insurance for your vehicle, its just called assurance instead of insurance. While, it won't pay for the cost of repairs due to an accident, it will cover mechanical breakdowns, which happen more than accidents. You have peace of mind when it comes to accidents, now get it for mechanical repairs as well.