You bought your repair contract, and now you’ve got to use it. What do you do?
All repair agreements provide instructions on what to do when you need repairs. Read the instructions carefully as soon as you buy the contract, so you can ask questions about the protocol. That way, when you do need the repairs, you’ve already got some idea. But you still want to go back and read the direction when you need the repairs. It’s important that you follow them exactly as printed because the obligor can deny the claim if you don’t.
Report the damage to the claim administrator named on the contract immediately. There’s always a toll-free phone number for exactly this reason. The claim administrator is often the obligor, but sometimes they hire separate individuals to adjust the claims on their behalf.
The claim administrator will almost always send someone to inspect the damage to the car if costly repair is needed. You will then have to approve a tear down. This is when they take apart a part of your car so that the inspector can get a closer look at the problem and what caused it.
If the claim administrator says that the breakdown is included in the repair agreement, it will provide the repair facility with an authorization number, which is a promise that the obligor will cover the cost. Write down the number and keep it along with the name of the administrator, the approved repairs, and the date and time of approval.
But what do you do if your claim is denied? Try these steps to see if you can get the repair paid.
1. Ask the claims administrator the reason for denying the claim. Find out what provisions of the repair agreement he/she is using and his/her evidence that they apply. Try to get it all in writing from the claim administrator directly. If the vehicle is inspected, get a copy of the report.
2. Get as much additional information as you can from the mechanic or service writer at the repair facility. Find out if he/she agrees with the claim administrator and why or why not. Try to get his/her evaluation in writing directly from the mechanic/service writer.
3. If the mechanic/service writer disagrees, talk to the claim administrator and explain what the mechanic/service writer told you. If possible, arrange a conference call so the mechanic/service writer can explain it to the claim administrator directly.
4. If the claim administrator still refuses, you may have to pay for the repair yourself then try to get reimbursed from the obligor later. Before starting the repair though, make sure the claim administrator has inspected it or told you it doesn’t need an inspection.
5. After or during repair, write an appeal letter. This is your chance to explain why you believe the repair should be covered and why the exclusions the claim administrator used don’t apply. Use all your notes to support your explanation. Address it to the insurance company that guarantees your service contract if you have a VSCP or just directly to the insurance company that provides your MBI policy. Attach copies of all relevant documents such as the estimate or invoice of the repairs, a letter from the mechanic/service writer, or proof of regular maintenance.
6. If the insurance company denies your appeal, seek assistance from the Department of Insurance to file a complaint. They can provide advice or assistance if your service contract is insured by a risk retention group type of insurance company.
7. You may even want assistance from an attorney and/or may choose to file a lawsuit in small claims court against the obligor (Note: this only applies if the claim is $5,000 or less).