Glossary

Administrator:
The company that authorizes and pays the repair facility for repair work to your vehicle. The administrator works with the repair facility to make sure your claim is handled properly. As they are the company that pays your claim, their financial strength is the most important factor in choosing a warranty company.

A.M. Best & Co:
A.M. Best Company is the leading source for insurance company ratings, analysis and information. A sound warranty administrator will have a rated insurance company backing them. A.M. Best can provide a rating for that company. You can visit their web site at www.ambest.com.

Auto Warranty:
See Extended warranty.

Basic Warranty:
The specific terms established by each manufacturer to repair vehicles through a specified mileage and/or time period. All factory installed and many dealer installed parts are covered under this warranty.

Bumper-to-Bumper Warranty:
The most comprehensive warranty you can buy. It will cover all parts of your vehicle and will only exclude a small list. Because the coverage is so comprehensive, it will only list the few parts not covered. Most similar to the manufacturer's warranty.

Car Warranty:
See Extended warranty

Certified Car:
Many cars sold used or off lease are certified by the manufacturer. This means they have undergone a quality inspection process prior to sale. Often, a limited powertrain warranty is attached to them. They do not have extended or bumper-to-bumper warranties. There is no industry standard for certification.

Claims Reserve Accounts:
An insured account that the administrator will maintain to pay future claims.

Consumable Items:
Parts such as tires, batteries, clutch plates and wiper blades that are not covered under any warranty.

Corrosion Warranty:
Covers rust through perforation on sheet metal. Offered as original warranty on new vehicles. Extended warranties do not cover corrosion.

Deductible:
The amount that you must pay the repair facility for work when vehicle is being repaired. Many plans are offered with a zero deductible option.

Drivetrain warranty:
See powertrain warranty.

Emissions Warranties:
The Federal Emissions Warranty guidelines are based on federal regulations and apply to vehicles in all 50 states. Vehicles are covered by two types of emissions control system warranty, "Emission Defect Warranty" and "Emissions Performance Warranty".
Depending on the state you live in, the Performance Warranty is for 3 years/50,000 miles.
The Defect Warranty is generally consistent with the manufacturer's bumper-to-bumper warranty with certain parts (catalytic converter and electronic emissions controls (PCM) for up to 8 years/80,000 miles. Please refer to your owner's manual for your exact coverage.

Extended Warranty:
A policy which protects the car owner against mechanical failures and breakdowns. Extended warranties are often referred to as Vehicle Service Contracts. The warranty will pay for covered repairs after the manufacturer's warranty has expired.

Exclusionary Policy:
The most comprehensive extended warranty available. It is typically referred to as a "bumper to bumper" policy. This particular policy lists components of your vehicle that are not covered under the warranty. If a part or component is not listed, then it is covered under an exclusionary policy. Most similar to new car warranty.

Gray Market Vehicle:
A vehicle not manufactured for sale in the U.S. They often do not meet U.S. standards and carry no manufacturer warranty. These vehicles are typically ineligible for extended warranties.

Inclusionary Policy:
A policy that lists the components and parts that are covered by the extended warranty. If the component or part is not listed, then it is not covered.

In-Service Date:
The date the Vehicle was purchased by the original owner and driven or the date the Vehicle was placed in use for rental, demonstration or other purposes.

Insurance Company:
The insurance company that issues an insurance policy and guarantees the obligations of the administrator. (See also A.M. Best)

Lemon Law:
The general definition of a Lemon Law vehicle: A vehicle with (a) major, repeated problem(s) that has been repurchased by, or had its purchase price renegotiated with, the manufacturer. The state then earmarks these as Lemon Law or Buyback vehicles. These vehicles are ineligible for coverage.

Maintenance Guidelines:
This is the normal, routine maintenance that is recommended by the manufacturer of your vehicle to keep the vehicle in optimum condition. These include such things as oil changes, tune-ups, checking fluid levels, tire rotations, wheel alignments, belts, hoses and others as described in your owner's manual.

Manufacturer's Warranty:
This is the standard warranty that every new vehicle sold comes with. All factory-installed parts are covered against defects. Typical manufacturer warranties are 3 years or 36,000 miles or 4 years or 50,000 miles. Check your manufacturer's warranty manual for warranty information or visit our Manufacturer's Warranty page.

Mechanical Breakdown Insurance (MBI):
A policy, contract, or agreement that undertakes to perform or provide repair or replacement service, or indemnification for that service, for the operational failure of a motor vehicle due to a defect in materials or skill of work or normal wear and tear, and that is issued by an insurance company authorized to do business in California.

A mechanical breakdown insurance policy (MBI) is a true insurance product. Like personal auto or homeowners insurance, the MBI creates a direct relationship between the vehicle owner and the insurance company. MBI coverages and premiums are regulated by the California Department of Insurance, assuring a fair price for the coverage is provided. Likewise, administrative, underwriting, and claim handling functions are subject to the review and control of the California Department of Insurance. They would also be covered by the California State Insurance Guarantee Fund providing a higher level of consumer protection over other types of contracts, including those that may be issued at the dealership or from a third party company.

Power Train Warranty:
A very limited warranty from the manufacturer that covers certain parts of your vehicle's engine, transmission and drive train assembly. If any of these components fail while the vehicle is covered under the powertrain warranty, the manufacturer is responsible for the repair. These warranties cover only about 25% of the vehicle.

Rebuilt Title:
See salvage title.

Repair Facility:
An authorized licensed repair facility located in the United States or Canada. This includes your dealership, local mechanic or national repair facilities.

Rental Benefit:
The amount you will be reimbursed for actual expenses incurred for substitute transportation while your vehicle is being repaired.

Roadside Assistance:
A program that provides you with a toll-free telephone number to call 24 hours a day 365 days a year. This is for assistance when your vehicle breaks down or when there is a vehicle emergency (towing, battery assistance, flat tire assistance, emergency lock out, or fuel, oil, fluid and water delivery) All Warranty Direct plans include free roadside assistance for the full term of the warranty.

Salvage Title:
A title issued on a vehicle where an insurance company has declared the vehicle a total loss. These vehicles were typically involved in a flood or severe accident. These vehicles are not eligible for extended warranties.

Transferability:
A vehicle having an extended warranty can have the warranty transferred to the new owner of the vehicle if the vehicle is sold privately for a modest fee. An extended warranty can not be transferred to a dealer.

Travel Interruption Benefit:
In the event of your vehicle not being operable and caused a delay en route and you are more than 100 miles from your home, this is the amount you will be reimbursed per day for restaurants and lodging.

Vehicle Identification Number (VIN):
Your VIN is located in several areas and is a unique 17-digit identifier of your vehicle. The most common are:
• On the driver's side dashboard of your car
• On your insurance card
• On the title to your vehicle
• On the vehicle's registration card
• On a sticker inside the driver's side door
Wear-and-tear:
Wear and tear warranties provide a broader contractual definition of what will be covered. Under all our programs, you are covered for parts that break as well as those that have worn beyond the manufacturer's tolerances.

©2005 Warranty Direct