One of our clients, we’ll call him Al Smith who asked for our assistance.  He purchased a 2002 Volvo with 58,000 miles form his local dealer.  Included with the purchase he also got an auto warranty.  It was one of the used car warranties offered by an insurance company.  Last December Al noticed a funny sound, since diagnosed as a pinging.  An Volvo specialist found a crack in his cylinder head, the gasket was blown over two rings, and it had a burnt engine block.

After inspection, the insurance company said that the damage was due to Al’s negligence and that he should have noticed the problem mush sooner. The insurance company said they will pay for the gasket, but not the balance of the repair which was more than $5,000.00.  He wanted to know if he had any recourse?

Answer: I don’t believe insurance-based used car warranties offer very good service or value for what they cost.  It would have been very difficult to detect any loss of power or misfiring of the engine, overheating, and the vehilce was taken in as soon as the pinging noise was heard. The argument that this is owner negligence just doesn’t make any sense.  If the vehicle had been fully serviced then his claim was legitimate. Get an independent engineer to write a report on the exact cause of the engine damage so that the claim can be brought to arbitration.  Used car warranties should always be written clearly. It always pays to spend a little more for a top rated auto warranty from a quality provider.