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The Fine Print of an Extended Service Contract


OH_Whoknew
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First, this is not another post to start a debate of whether extended service warranties/contracts are a good idea or not.   It is more of a ringing endorsement for understanding the fine print and to share a discussion I had with one of the warranty providers.   The bottom line of what follows is if an item fails, that is not original factory installation, or an approved dealer installed item, there is a likelihood that item would not be covered by the warranty program.

I am negotiating on a used fifth wheel camper and was offered an extended service contract by the dealer.   I also contacted two other providers commonly recommended on this forum and got their quotes and contracts for comparison.   

They all had clauses that read something to the effect of, covered items are:

“Factory installed or approved Dealer installed……”, 

And then found this line:

“This Agreement provides no benefits or coverage and We have no obligation under this Agreement if:   ……Your Vehicle is modified from the Vehicle manufacturer’s original specifications regardless of who or when the modifications were made…..”

I had the good fortune to be able to talk with the original owner on the dealer lot and he told me all the upgrades and repairs he had made during the years he owned it.   Really good, smart things.   Like the Progressive EMS/Surge protector system, ice maker, satellite dish, upgraded MorRyde shackles and suspension, converted from drum brakes to disk brakes, multiple 6V batteries instead of 12, replaced and upgraded one of the AC units, and lots of other things.

So I asked the warranty brokers if these things were covered.   One has returned my call and said essentially no.  He had called the issuing company for the warranty program who after much discussion said, with this many things having been modified after market, (good idea or not) they would not issue a policy for this coach at all.   Say what??

I asked specifically if the coach owner did his own installation of the Progressive EMS system, as I have seen discussed in other posts on how to do this, is it covered should it fail.   Nope.   He said:  "And since the “electrical system” was modified and was not part of original electrical factory installation, it is likely that anything related to electrical would not be covered."  (Jaw now resting on the countertop)  The owner could be a certified master electrician but if not factory or dealer installed, not covered.  So a person installs something really good to protect themselves and their coach, better than an end of shore power surge protector, and it could invalidate the warranty.  Wow!

So I offer this as an example of really digging in on these contracts as many experienced folks have posted before, knowing what is or is not factory installed should you be looking at a used unit, and if you make upgrades to your own unit, consider if this will have an effect on your warranty.

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Excellent advice. Extended warranties (service policies) are all written as to make it most difficult for a claim to be submitted correctly, and for the customer/owner to have any confidence the claim is going to be approved.   Many, many posts on all RV forums about problems with claims.    I saw today on a tv ad an offer to get an extended warranty on your vehicle that could have up to 150k miles on it. Can you imagine all the 'outs' written into that scam offer?

Many recommend putting the cost aside and add to it in a savings account, then draw on it when repairs are needed.

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I am often amazed by the number of people who sign contracts of any kind without taking time to read and understand every line. What you say is correct as far as you go but you are only quoting one extended warranty contract. If you go one who sells the "inclusive" type rather than what you have there, you will find very different wording. 

20 minutes ago, jblo said:

Extended warranties (service policies) are all written as to make it most difficult for a claim to be submitted correctly, and for the customer/owner to have any confidence the claim is going to be approved. 

If you buy a cheap one, you get exactly that. If you spend more and read what you get one of the better ones, it is not true. And it really isn't a service contract either and those who think so are sure to be disappointed. What they really are is a health insurance policy for the RV and like all insurance, you seldom save money unless you have major problems. Also like any type of insurance, if you buy the cheapest policy you can find it will be pretty much as jblo has described. 

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Lots of 'gotchas' in these policies--even my Ford ESP PREMIUM policy on wife's MKX got me on definition of 'trim' piece vs 'functional' piece. 

Wouldn't it be great if it were all "What you see, is what you get"? Instead of what you DON'T see WILL get you.  Even looking at all the fine print, it is difficult to determine exactly what they are allowing/disallowing.

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Like all ESP plans a preapproval is required for any service. My plan required that the Mobil tech, I was in the Outer Banks of No Carolina and far from a dealer, send them a written estimate before they would approve the work. Then they insisted on a second Mobil tech of their choice to make a second opinion. They would not pay for my Mobil techs time for his inspection and the time he had to be there for their independent techs inspection. They also would not pay for the shipping and sales tax of the parts. So a $50 deductible ended costing me over $700. But the entire repair was over $6,000 so it still was a benefit to have the coverage. I just was expecting to only be out of pocket $50 not $700. 

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15 hours ago, Twotoes said:

Like all ESP plans a preapproval is required for any service. My plan required that the Mobil tech, I was in the Outer Banks of No Carolina and far from a dealer, send them a written estimate before they would approve the work. Then they insisted on a second Mobil tech of their choice to make a second opinion. They would not pay for my Mobil techs time for his inspection and the time he had to be there for their independent techs inspection. They also would not pay for the shipping and sales tax of the parts. So a $50 deductible ended costing me over $700. But the entire repair was over $6,000 so it still was a benefit to have the coverage. I just was expecting to only be out of pocket $50 not $700. 

I have had people from the ESP  SAY that they dont cover shipping or tax when in fact the "fine print" said they would.

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I find this policy makes perfect sense.  The insurance policy is designed to provide repairs for the original equipment, not modifications that might not have been done properly or might not be suitable.  If the unit has been extensively modified then I can see why insurance would not be suitable for either party.

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Good friends, who are full-timers, had their Norcold refrigerator cooling unit fail. They contacted their ESC provider and asked about substituting a residential refrigerator. The ESC provider said yes they will pay for the substitution residential refrigerator, BUT they will not cover the residential refrigerator(despite the much lower cost), as it is not original equipment for their MH.They opted for a new Norcold.

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7 hours ago, JimK said:

I find this policy makes perfect sense.  The insurance policy is designed to provide repairs for the original equipment, not modifications that might not have been done properly or might not be suitable.  If the unit has been extensively modified then I can see why insurance would not be suitable for either party.

I agree with Jim and I understand why, within reason, extended warranties would not cover owner installed parts.  

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19 hours ago, JimK said:

I find this policy makes perfect sense. 

Another reason for this policy is that the underwriters have no way of knowing what kinds of equipment they may be insuring if they do not exclude owner added modifications. I have seen RVs that were modified to have a photo-lab, a sound studio, and even one that had caged macaws in the slide. 

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