The definitions contained here are defined by how they relate to extended warranties and vehicle service agreements.

Administrator: A company that authorizes and pays the repair facility for repair work to your vehicle. The administrator works hand in hand with the repair facility to make sure your claim is handled properly.Extended Car Warranty Terms and Glossary

A.M. Best & Co: A.M. Best Company is the leading source for insurance company ratings, analysis and information. It offers comprehensive, quality data on more than 6,000 insurance companies. The company was founded in 1899 and their rating system has become the industry’s standard measure of an insurance company’s financial condition.

Cancellation: Typical cancellation clauses of an extended warranty are for the owner to receive a full 100% money back guarantee if the policy is cancelled with the first 30 days of enrolling, if there have been no claims filed. After 30 days the refund is usually prorated based on time and mileage that the policy was in force.

Corrosion Warranty: A corrosion warranty is a warranty from the manufacturer that covers rust and perforation on the metal body of the vehicle. Check your manufacturer’s warranty manual for the period of time that the vehicle is protected.

Deductible: The amount that you must pay the repair facility for work when vehicle is being repaired.

Diagnostics: The exploration the repair facility administers to certain parts of your vehicle to determine the necessary repairs needed for your vehicle to be operable.

Eligibility: Determining of a vehicle being in certain classifications and which coverage can be applied to the vehicle. A vehicle typically must be less than 10 model years old and have less than 100,000 odometer miles to be eligible for an extended warranty. Additionally, vehicles with less than 50,000 miles and less than 4 years old are eligible for more comprehensive coverage than may be available to older more driven vehicles.

Extended Warranty: A policy, which protects the automobile owner or lessee against mechanical failures and breakdowns. Can also be termed Vehicle Service Agreement or Extended Service Agreement. This warranty will pay for your vehicle’s 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.

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.

Inspection: The examination or review of your vehicle’s components by a certified mechanic. A vehicle will pass a pre-warranty inspection only after the mechanic attests to the proper working condition of all components of your vehicle.

Insurance Company: The insurance company that issues an insurance policy and guarantees the obligations of the administrator.

Make: The Make of your vehicle is the same company that manufactured your vehicle.

Manufacturer: The manufacturer is the company that built your vehicle.

Manufacturer’s Recommended Maintenance Guidelines: This is the routine maintenance that is recommended by the manufacturer of your vehicle to keep the vehicle in satisfactory working order. Typical guidelines to be followed include: changing the engine oil, checking proper fluid levels, tire rotations, wheel alignments

Manufacturer’s Warranty: This is the promise of your vehicle’s manufacturer to repair your vehicle for a specified period of time and/or mileage. All factory-installed parts are covered against defects and workmanship. 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.

Model: The model is the type of vehicle that was made by the manufacturer.

New Vehicle: When discussing extended warranties, the term new vehicle means an automobile that is still covered by the original manufacturer’s warranty.

Odometer Miles: The actual total miles the Vehicle has traveled as viewed on the odometer. This is the mileage stated on the odometer.

Plan Term: The amount of time in years or the total mileage that your extended warranty policy will protect your vehicle.

Plan Expiration: This is the date or odometer mileage that policy will no longer be in effect. For example, a 7 year / 100,000 mile extended warranty, will expire 7 years from the date that you enroll your vehicle or when the odometer reads 100,000 miles.

Power Train Warranty: A limited warranty from the manufacturer that covers certain parts of your vehicles 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.

Reinsurance Company: The insurance company that issues an insurance policy and guarantees the obligations of the insurance company. A reinsurance company is required only when a Risk Retention Group insures your vehicle service contract.

Repair Facility: An authorized licensed repair facility located in the United States or Canada. This includes, but is not limited to your dealership, local mechanical facility 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)

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.

Travel Expense / Trip 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 restaurant meals and lodging.

Used Vehicle: When discussing extended warranties, the term used vehicle means an automobile whose original manufacturer’s warranty has expired. This term has nothing to do with ownership of a vehicle.

Vehicle Identification Number (VIN): Your Vehicle Identification Number (VIN) is a 17 digit alphanumeric series, which describes the characteristics of your vehicle. Each vehicle has a unique number. It is located in several places. The most common are:

1. On the title to your vehicle

2. On your insurance card

3. On your registration card

4. On the driver-side dashboard of your vehicle.

Wear and Tear: When a part or component has failed because it can no longer perform the function for which it was designed solely because of its condition. When the part has worn beyond the manufacturer’s tolerances allowed for that particular vehicle at the mileage when the problem occurs, if it has received manufacturer’s recommended maintenance. It is very important to understand the difference between “wear and tear” items and parts that are considered normal maintenance that can wear out. Normal maintenance items that usually wear out are typically not covered under an extended warranty program. Some examples of parts that wear out that are not covered are brake pads and rotors, brake shoes and drums, and manual clutches.