Extended Warranties

[barbender]

Hey, I'm into my H2 for 60 days now and I'm thinking it would be wise to get an extended warranty. Any suggestions? Which company? I get mailers and email but I have no idea any of these companies will be in business in 3 years. I'm sure the GM warranty is way marked up in price. Any thoughts?

[barbender]

Hey, I'm into my H2 for 60 days now and I'm thinking it would be wise to get an extended warranty. Any suggestions? Which company? I get mailers and email but I have no idea any of these companies will be in business in 3 years. I'm sure the GM warranty is way marked up in price. Any thoughts?

[Klaus]

Here are some links to other threads about buying an extended warranty:

http://www.elcova.com/groupee/forums?a=tpc&s=2826088551&f=5106011751&m=2726026471

http://www.elcova.com/groupee/forums?a=tpc&s=2826088551&f=5106011751&m=9326087312

http://www.elcova.com/groupee/forums?a=tpc&s=2826088551&f=5106011751&m=3996006172

Klaus

"God made some men big and some men small, but Sam Colt made them all equal."

[barbender]

I shoulda known. Thanks Klaus.

[Klaus]

Extended warranty could be worthless due to bankruptcy

Nov. 10, 2003 12:00 AM


If you bought an extended warranty for your car, there's a good chance it might be worthless.

It's all because of a huge mess created by a company called National Warranty Insurance Co.

"Extended service agreement" is the official term for those warranties. It's basically an insurance policy for your car. A group of people pay into a pool, and claims are paid out of the money collected.

National Warranty handled that pool of money as part of a risk-retention group. It backed policies for hundreds of thousands of customers. All was going great until June 6. That's when a court in the Cayman Islands declared the company insolvent. In other words, it was in big money trouble.

National Warranty is now the focus of a major battle in bankruptcy court. It's hard to predict what will happen in court, but for some of you, the crisis could hit soon.

If you own an extended service agreement that was bought before June 6 and backed by National Warranty, you can't make a claim. Companies like Warranty Gold are telling their customers that there is no money to pay because it's tied up in the courts.

Of course, it's not that simple. Some people contend that not all the money went to National Warranty and that some of it should be available to pay claims. There is a class-action lawsuit on behalf of customers who are now victims.

Warranty Gold wasn't the only company selling policies backed by National Warranty. Many car dealers sold them under a variety of names. Some dealers have stepped up and done the right thing, fixing cars for customers who bought the policies. Others are playing the legal card, saying it's tied up in bankruptcy.

The first thing you need to do is find the contract for your extended service agreement. Find out if National Warranty was the underwriter. If it is and you've finished paying for it, get ahold of whoever sold it to you. Find out if claims are being paid.

If you haven't finished paying for it, stop the payments. Don't throw money into a policy that will probably never deliver. They'll tell you that if you stop paying you won't be able to collect when the bankruptcy is settled.

That's assuming there's any money left when the National Warranty mess is sorted out.

http://www.azcentral.com/arizonarepublic/local/articles/1110action10.html#

Klaus

"God made some men big and some men small, but Sam Colt made them all equal."

[Klaus]

S&P Assigns National Warranty Insurance RRG 'R' Rtg


DOW JONES NEWSWIRES

The following is a press release from Standard & Poor's:
NEW YORK (Standard & Poor's) Nov. 6, 2003--Standard & Poor's Ratings Services said today that it assigned its 'R' financial strength rating to National Warranty Insurance Risk Retention Group (National Warranty) reflecting the company's current state of liquidation.

National Warranty began a termination procedure on Aug. 1, 2003, by order of The Honorable Mrs. Justice Levers of the Grand Court of the Cayman Islands, when George Theodore Lanyon Bullmore and Simon Lovell Clayton Whicker, partners of the Cayman Island member of KPMG, were appointed as joint official liquidators of the company.

National Warranty ceased paying claims in June of 2003. The liquidators have said that the company's liabilities might exceed its assets by $100 million.

"National Warranty is the focus of several class action suits by policyholders in the various states it operated in," said Standard & Poor's credit analyst Ovadiah Jacob. "The company's position on these suits is that as a risk retention group it did not issue policies directly to policyholders; instead it insured member issuers or car dealerships that in turn offered their customers extended warranties," Mr. Jacob added. As such the company does not see itself as directly obligated to the policyholders.

National Warranty, a Cayman Islands-based risk retention group had until recently operated out of Lincoln Nebraska where its operations have since closed. Because National Warranty was one of the first companies in the U.S. to be incorporated outside the country under a 1981 federal law, it has escaped regulation by insurance departments in several states.

An insurer rated 'R' is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the regulators may have the power to favor one class of obligations over others or pay some obligations and not others. The rating does not apply to insurers subject only to nonfinancial actions such as market conduct violations.