‘I was flabbergasted’: Car repair warranties may not have you covered

COCOA, Fla. — A Cocoa woman claims an auto extended warranty company refused to cover thousands in repairs even after local experts said she qualified for coverage.

“I just feel like I’m old and dumb,” Wanda Schultz said.

Shultz feels betrayed by the CARCHEX extended warranty she bought to cover her 2009 convertible Volkswagen.

She says the car has had minor mechanical issues that were repaired at a local repair shop, Robbie’s At Your Service.

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“You might want to think about an extended warranty because the car is 10 years old,” Schwartz said she was told by the shop manager.

She bought a $3,000 policy for the CARCHEX two-year warranty. Nearly six weeks later, Schwartz says, the car had trouble going into reverse. She took her car to Robbie’s At Your Service and the manager discovered it needed a new transmission that the warranty should cover.

But after an inspection service hired by CARCHEX examined the car, her claim was rejected.

“They said it was a pre-existing condition, and I said it’s 11 years old, what would not be pre-existing,” Schwartz explained.

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“I was flabbergasted that they declined it twice,” J.J. Jensen said.

Jensen is the manager at Robbie’s At Your Service. He told Todd Ulrich that they took apart the Volkswagen’s transmission and found the breakdown had just happened. Jensen said there weren’t any signs of long term damage, and in the shop’s opinion, it was not

a pre-existing condition.

“They (CARCHEX) sent an adjuster here twice to look at it. He verified both times it was not pre-existing but they still denied the claim,” Jensen said.

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CARCHEX is rated A-plus at the Better Business Bureau because it responds to complaints. The company had 63 complaints in the past year, and many were about denied claims.

Action 9 contacted CARCHEX. Managers said the vehicle should have been towed, they claim a third-party administrator found it was a pre-existing condition, and they said the company doesn’t benefit from denying claims. CARCHEX said it will offer Shultz a $342 refund. CARCHEX said that’s the amount of her monthly payments before she cancelled the policy over the transmission issue.

Shultz had paid $4,500 out of her pocket to fix the transmission.

“I would love for them to reimburse my money. That would be a wonderful thing,” Shultz said.

Consumer Reports says extended warranties can be good buys for newer used cars, but for older models, it may be best to skip the protection and save the money to pay for repairs.

CARCHEX response:

Our customer service team is reaching out to the customer to provide her a full refund of her premium paid. For the record, we did try to reach her by phone unsuccessfully on 12/14/2020 after she left a negative review of CARCHEX online to attempt to address her issue help her find a satisfactory resolution. Mrs. Shultz does not appear to have asked CARCHEX for a refund at any time.

For clarity, I do see a note in here that she drove the vehicle to the shop after this failure occurred. Mrs. Shultz was required to have the vehicle towed to the shop, as to not cause any further damage, per her Vehicle Service Contract. Towing is included in her coverage. In other words, Royal Administration would have been in the right to deny the claim at that point, should they been jsut looking for a way not to pay. Royal Administration still adjudicated the claim to determine if the failure should be covered.

Also, I have attached the CARFAX report for the vehicle showing that the vehicle had been in the shop immediately prior to the purchase of her Vehicle Service Contract. The CARFAX note just says “vehicle serviced,” without any details of the service. As I said on the phone, this could merely be a coincidence but since Mrs. Shultz has accused Royal Administration and CARCHEX of acting in bad faith, I only think it’s fair to determine what service and problems discovered were included in that visit to the shop. Obviously, without the repair details, I can’t make any determinations and I’m not going to make any assumptions but I’m sure you understand that Royal Administration sees a lot of consumer fraud in early claims. In any case, as you can see, CARCHEX is more than willing to provide complete transparency into this matter.

As I explained when we spoke, it’s to CARCHEX and our customer’s benefit that no claims are denied. We receive no benefit for a denied claim, quite the opposite. When a claim is denied by a third-party administrator, a customer may be upset, and they may cancel their contract which is what happened here. Neither of those are positive things for CARCHEX.

In any case, I hope we can help Mrs. Shultz feel better about her experience by providing her will a full refund of her VSC premium paid.

Todd Ulrich, WFTV.com

I am WFTV's Action 9 Reporter.