What happens when damage isn’t covered by warranty
If you’ve ever owned a vehicle that you’ve taken to a dealership, you’ve probably heard of the term consequential damage(s).
Nearly every automaker’s warranty booklets contain the phrase, usually under the sub-heading What’s Not Covered Under Warranty. Not knowing the reasoning and applications behind these exclusions can cost you money and inconvenience.
Consequential damage warranty exclusions usually state that only the failed part is covered under the terms and conditions and not any damage its demise may cause to other components. For example, a new $15 wiper blade may fail and scratch the windshield, but the blade maker won’t voluntarily cover the costs of new $750 glass. Or, in the case of a vehicle with a longer power-train (engine, transmission and driveline components) guarantee than its base coverage, when a drive-axle fails and breaks a nearby brake line, the axle would be covered by the existing warranty, but not the brake line if the base warranty had expired. Confusing? You bet!
A lot of carmakers now don’t differentiate between base and powertrain warranties, instead covering everything for a competitive length of time and distance, so you seldom run into this problem. And even the ones that still provide shorter base than powertrain coverages will seldom put their loyal clients through this wringer, instead using their channels to get the repairs completed without any charge.
Still, their warranty documents list the exclusions. This provides them some protection against claims for lost wages, inconvenience, rental cars or extended travel costs when a breakdown occurs while the customer is travelling.
What automakers are dealing with in these situations is avoiding the risks caused by unpredictable drivers/owners. For example, if that new water-pump you had installed last week (that you paid for) starts leaking and you have it checked before the engine overheats, if a replacement pump is required, you’re likely covered. But if you continue driving the vehicle with all the dash warning systems lit up and the engine fails because of overheating, you’re likely in for an astronomical repair bill.
In short, warranties ask you to treat their money as if it were your own. When a problem arises, reasonable responsible drivers are expected to minimize damages by safely stopping (if possible) and getting things checked out by someone with the necessary experience.
Taking a who cares, it’s under warranty approach may bring a painful lesson in consequential damages.