It’s important to understand the terms and conditions of the protection plan you are purchasing. That’s why we prepared this glossary. If, after reading this page, you are still unsure about the meaning of a term in your service contract, please feel free to contact us directly.
The administrator is the company that handles the claims process with your repair facility and authorizes any covered repairs under the service contract terms.
The National Institute for Automotive Service Excellence (ASE) is an independent non-profit organization that certifies automotive professionals in the automotive repair and service industry.
Auto insurance provides property, liability, and medical coverage for vehicles and/or their owners. It does not cover mechanical or electrical failures and is separate from a vehicle service contract.
This refers to a failure — due to defects in materials and/or workmanship — of a covered part to perform the function for which it was designed by its manufacturer.
During the claim process, the repair facility mechanic diagnoses the reported failure and contacts the Plan Administrator. The Plan Administrator adjudicates the claim and authorizes repairs covered under the service contract terms.
Covered Parts and Products
This refers to the parts or components listed under the Coverage section(s) for your particular plan.
A deductible is the minimum portion of the covered repair which you must pay. The amount of your deductible is shown on your schedule page. This amount is applied per claim.
Total Exclusionary Coverage
This is the broadest level of coverage available for a vehicle. This coverage includes the broadest list of covered parts and products.
The set date or mileage at which the vehicle service contract is no longer in force. Usually, the expiration of coverage is determined by whichever comes first: time or miles.
The labor rate is the amount charged per hour by the repair facility for work that is necessary in order to repair a breakdown.
This term refers to the warranty provided by the manufacturer at no cost to you. It generally covers repairs to the vehicle to correct a defect in material, workmanship, or performance for components listed in the manufacturer warranty.
These guidelines are recommended by the manufacturer of the vehicle and are usually found in the owner's manual. Following maintenance guidelines allow the vehicle to perform at its highest potential.
OEM stands for Original Equipment Manufacturer. An OEM produces parts that are sold to another company, such as an automobile manufacturer, to be used in that company’s products.
This is also referred to as the "drive-train" of the vehicle. The power train includes the vehicle's major components such as the engine, transmission, and drive-axle.
This service assists motorists whose vehicle has suffered a breakdown which leaves the motorists stranded.
A form of vehicle title with the Department of Motor Vehicles noting the vehicle was damaged or deemed a total loss by an insurer that paid a claim on it. The criteria for determining when a salvage title is issued differ considerably by each state, province, or territory.
Stated Component Coverage
Stated component coverage is a vehicle service contract listing the major parts and components on the vehicle covered by the contract.
Vehicle Service Contract
A vehicle service contract is purchased by a consumer to cover the cost of repairs for stated components, including parts, labor, and taxes, where applicable, which are not covered by the manufacturer warranty. A vehicle service contract is not auto insurance.
The vehicle identification number (VIN) is a unique set of numbers used by the motor vehicle industry to identify a vehicle.
Wear and Tear
Wear and tear is deterioration that naturally and inevitably occurs as a result of normal wear or aging.