Many of our clients offer their customers a used car warranty through the big names in the warranty world. The websites and glossy brochures portray professionally run businesses, easy to contact, easy to claim, and quick pay outs. These relationships with our clients appear to be mutually beneficial and, on the face of it, provide a positive outcome for consumers.
However, what is the reality? Client sells a warranty to their customer, customer makes a claim, warranty pays out claim, and everybody is happy.
Let’s look at another scenario. Our client sells a warranty to their customer, customer makes a claim, warranty DOES NOT PAY OUT the claim, and customer is unhappy!
In a recent court case, the customer was so unhappy that they made a claim against our client and the warranty company. The customer’s warranty claim was rejected because of “wear and tear”, the customer claimed it was mechanical fault. I won’t go into the details, however, the interesting fact in this case was that our client’s warranty company claimed they were not liable as the contract is between the consumer and our client!
They effectively threw our client “under the bus” which as you can imagine was a complete shock as our client’s perception was that his warranty company dealt with the administration of the warranty and the claims process. Fortunately, the judge was having none of this and made it clear that the warranty company WAS liable. The customer’s claim was administered by the warranty company, and they were the ones refusing to pay the claim, not our client. Because of the complexities of the issues involved, the judge found that both our client and the warranty company were both jointly and severally liable. This was a huge relief to our client as he could have been facing a much larger bill.
That said, our client and his warranty provider have potentially now irreconcilable differences. You may want to check your warranty provider’s terms and conditions and your working relationship. Small claims are paid out, no questions asked, but when it comes to the larger claims, what really happens?
Is it time to re-evaluate your warranty provider and turn your warranty cost into a profit and improve your customer experience?
Contact Lawgistics and ask about our in-house warranty scheme.
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