Guide to Auto service contracts

13 What is Covered continued — The broadest level of coverage includes every mechanical part except the parts listed on the contract as “excluded.” This type of contract is sometimes called an “exclusionary” contract. Some people only want to have coverage for the most expensive repairs, like repairs to the engine or transmission. They are able and willing to pay for less expensive repairs using their savings, or prefer to buy a less expensive repair agreement even if it means less coverage. Other people want their repair agreement to cover more repairs, including less expensive repairs (for example, water pumps or sensors), even though a “broad” repair agreement covering more repairs will cost more, and a covered breakdown may never occur. It is common for VSCs and MBI policies also to pay for towing and rental car costs that you incur while your vehicle is being repaired. Some agreements also provide coverage for lost or damaged key fobs, windshield damage, paintless dent repair (PDR), or damage to tires and wheels from road hazards. When considering the purchase of a VSC or MBI policy, you need to read the whole agreement to learn which parts are covered. As noted above, the broadest coverage is a so-called “exclusionary” contract, in which all parts and services are covered except the parts and services listed in the “Exclusions” section of the VSC. With contracts that provide coverage that is less broad, a part or service must be specifically listed in the “Covered Parts” section of the contract to be covered. Regardless of whether a repair agreement is of the “exclusionary” type, or the “specified parts” type, a breakdown to a part will not be covered if a provision in the contract excludes coverage based on the nature of the breakdown (for example, if you contributed to the breakdown by failing to properly maintain the vehicle).