Complaint Review: National Warranty Corporation

I purchased an extended warranty for my vehicle with Premium Plus coverage which is an exclusionary policy.  That means all mechanical and electrical parts are covered unless they are specifically excluded in the agreement.

On September 18th, 2014 I submitted a claim to repair a coolant leak.  National Warranty Corporation dispatched an investigator who determined that the metallic "water pump housing" had failed.  It was not a rubber hose, belt, gasket, or other normal maintenance item.  This part was also not on the list of excluded items but National still denied the claim stating that the water pump housing was not a "mechanical part".

The extended warranty contract does not define the word "mechanical" but I was told verbally that National Warranty only consideres it mechanical if there are moving parts involved.  Merriam-Webster dictionary defines "mechanical" as (1a(1)) "of or relating to machinery or tools" and (1a(2)) "produced or operated by a machine or tool."  This part meets both of those definitions.  It definitely relates to machinery and was definiely produced by machine.  The dicitonary listing also contains several other definitions but none of them require moving parts.  Even if that was one of the definitions, it would not invalidate the other definitions unless it was specifically defined that way in the contract that I signed.

I paid extra for the exclusionary "Premium Plus" policy because I am a typical consumer and not an automotive expert.  As such, it was easier for me to understand a list of what was specifically excluded rather than what was included.  As a consumer, I must be able to rely on standard dictionary definitions when interpreting a business contract.  I cannot be expected to somehow magically know before signing that the company will be imposing selective or fabricated definitions of their words. 

In my opinion, this practice is both illegal and highly unethical.  Buyer beware.