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Smart Shopper Extended Warranties
2870 messages, Last post on Nov 23, 2009 at 4:56 PM
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Edmunds article: Third-Party Extended Warranty Scams
| Ok, I went to my dealer for service on my 02 Chevy Trailblazer and I mentioned to him that I have the API Platinum Ext Warranty. He told me that API was being bought by another company and that they were not paying any claims and that I'd have to pay the dealer for the repairs and then submit the claim to API. After getting the diagnosis today and asking some more questions about API, I started to get suspicious of what the service advisor was telling me, so I did a Google search and found a brief post on another forum that API went bankrupt. Does anyone have any information about this? Thanks. | |
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Replying to: varsitysg (Jun 06, 2007 12:00 pm) Don't know if they are in BK or not but make sure you get prior apporval for the repair or if they are like mos after markets they can deny the claim. Call the phone number on your Service Contract and ask BEFORE they begin the work. |
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Replying to: varsitysg (Jun 06, 2007 12:00 pm) |
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Thanks for the responses. Ok, API is not necessarily bankrupt, but they are out of business. I was able to get through to someone at their 800# and found out that their insurance company who backed the warranties is paying out claims to dealers, however, they are paying by check which many dealers won't accept. They are accepting claims filed by customers, but, of course, you have to pay the dealer out of pocket first. I did buy the warranty from the dealership that I use for service. They were dishonest with me initially the other day saying that API was being bought out by another company and not paying claims. When I found out that the insurance company was indeed paying claims, but the dealer wouldn't accept their paymeny by check, I got pretty pissed and raised hell with the dealer. I got a sheepish phone call at about 7pm from my service advisor who said that he called API and as of today, they are paying claims. Coincidence, huh? Not. They've been paying claims, the dealer just didn't want to wait for their check. I have to say that I've been pleased up to this point with the 7/100 ext warranty from API. It cost a pretty penny and I think I could have negoatiated the price down a little, but I've more than got my money out of it with no problem up until now with about 6k miles left on the warranty.
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Replying to: varsitysg (Jun 07, 2007 5:16 am) API is a piece of a larger holding company, NServ Inc. Nserv is owned almost exclusively by James Hawk and his son, James Hawk Jr. Nserv consists of four companies, API (Automotive Professionals Inc), SRI (Service Resources Inc), BPI (Brokerage Professionals Inc) and IWS (Intercontinental Warranty Services). API sells auto warranties through dealerships, IWS sells warranties through credit unions. These warranties are advertised as being backed by "major insurers". In fact, the vast majority of API's contracts, and ALL of the IWS contracts are backed by Marathon Financial, a risk retention group. It is critical that you understand this, in order to follow what they are trying to do. Part of your warranty may have been the "GPR" or Guaranteed Price Refund. The GPR is a loser for the company... a real loser. And this has been known for over a year, actually closer to two years. Yet the company continued to sell GPR until 2/1/2007. And they shut down the business on 2/15/2007. More importantly they continue to happily sell GPR through IWS today, along with those Marathon backed contracts through www.iwsgroup.com. The way things are structured, the dealer sells you the warranty. There is a lot of fat in that price that you pay. A lot of fat. The dealer clips that off that top and hands over the rest to BPI. BPI skims some off the top, and then places some in an off shore account that is the "reserve" that is put in place for the dealer to pay claims. If the reserve goes negative... then the insurer has to pick up the tab. BPI then sends the remainder to API as the price of the contract. Some of that money goes to the insurer as a premium for insuring the reserve account. The rest is API's profit. Then when you call to make a claim, you talk to SRI. And they charge a fee to handle that claim. That fee is paid by BPI who takes the fees back out of the reserve accounts. All of these companies are in the same building... in the same room even. Why it was setup that way became obvious when they pulled the rug on 2/15. It was incredible, cold hearted and cowardly what was done. They simply stopped answering the phones. But the setup prior to this was even more sickening. All through December and January they accepted GPR claims, and told customers their claim was approved and the checks were 'in the mail'. Right. Then people had cars in for repair and were trying to call. Nothing. No message saying we're out of business. Nothing. Just a happy voice mail. Thousands and thousands of voice mails came in. When the box got full -- they dumped them. I heard women crying on the phone, people begging for someone to call them back. Now keep in mind that the calls were coming into 'SRI' who continued to operate full tilt. They processed claims for Intercontinental Warranty Services and any API contract that wasn't backed by Marathon. But because it was known that Marathon would most likely not survive API's default, and couldn't pay the fee to SRI, they just acted like they didn't have to answer the phone. All the same company. All the money goes into the same clowns pockets. The Hawks. About a week after the mess started the Illinois Dept of Insurance shows up. They setup an office and start auditing. Oh... and Allstate Insurance is onsite, because they backed about 70,000 contracts starting mid 06. They were a real piece of work too... they actually convinced API to continue to sell contracts the same day they closed. Yep... you got it... we stop taking phone calls on claims and are stiffing people right and left... but you could still unknowingly by an API contract. In fact I am almost certain that Hoffman Honda had been rolled over to Allstate. So probably while you were standing there screaming about being screwed by API they were still selling API contracts. There were certainly other dealers all to happy to screw people as fast as they could. So the Dept of Insurance is really an interesting bunch. They basically can't find their rear using both hands. And they do NOT want API to go under because then they get handed the bill. Do you really think the state of IL wants to send money out of state to pay claims???? Hardly. The DOI begins making the company take claims calls. But almost everything is still routed to vmail. Allstate wanted the DOI to go away. They actually instructed the claims adjusters to tell callers that got through to call the IL DOI and complain because they are the reason their claims are not being paid. And Allstate has lots of pull in IL. Their offices are right there. next...... |
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Replying to: uvebeenscrewed (Jun 09, 2007 10:12 am) But IWS continued to sell Marathon backed contracts as fast as they could. Along with GPR. Think about what is going on... there is incentive for all the players to limit the damage and keep everyone moving along. The IL DOI doesn't want to see API or Marathon go under. Allstate wants to continue to sell these very lucrative auto warranties. The Hawks want to continue to sell Marathon backed warranties through IWS. But somebody has to pay the bill. And whose not in the group above? You. So guess who got screwed. This was a well thought out plan that was put in place a long time ago. You see the GPR portion of the contract is not backed by the insurer. Yeah.. its the sole responsibility of API and IWS to pay that out. Marathon is in a bind... Allstate offers to buy out the 'good' accounts on the cheap (the ones with non-negative reserves) -- minus GPR of course. So GPR customers and customers who happened to be unlucky enough to buy from a dealer with a lousy claims history are now being stiffed. Easier to sweep that under the rug. From the Hawks point of view all they want is to keep IWS afloat. Intercontinental Warranty Services can still remain profitable for a while and they can begin to setup the same scam or a variation for the state of Florida. Whatever you are hearing when you call into API is most likely a lie. I have heard unbelievable things. The story can change daily. Your best bet is to avoid API and IWS and purchase a factory backed extended warranty if you REALLY think you need one. Personally I will never buy one again.
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Does anyone out there know what a Honda dealer would charge for 10 year 100,000 mile ($0 deductible) bumper to bumper warranties on those two cars? I'm wondering if the hybrid's higher expected maintenance and repair costs are reflected in the warranty prices. |
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Replying to: joe131 (Jun 09, 2007 1:23 pm) Isn't the maintanence interval on all hybrids every 10K miles?
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Replying to: joel0622 (Jun 09, 2007 1:51 pm)
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Replying to: joe131 (Jun 09, 2007 1:53 pm) |
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