So you’ve got a nice, shiny new insurance policy for your home or car and you’re keeping your fingers crossed that you don’t actually have to use it. But on the off chance that something in your master plan goes awry and you have to make a claim, what, exactly, will your insurance company do for you?

Well, once your claim is approved and you know the repairs to your home or car will be covered, you might be surprised to find that your car or home insurance policy comes with a guarantee on the repairs done to fix damage (most insurance policies have some type of repair guarantee). That service usually comes with a whole host of perks, but only if you use one of the insurance company’s preferred vendors.

What’s the deal with service guarantees?

Insurance companies in general love to use their own preferred vendors when it comes to home or car repairs. Why? There are several reasons. First, it saves you (and them) money in the long run. Insurance companies want the work done right, on time, and on budget. And they’re more likely to get it (along with a predictable price) with their trusted partners than if you go to your local shop around the corner. When insurance companies can put a price tag on common repairs, it also helps to reduce premiums. And when there are no surprises on the costs of repairs, there usually aren’t bigger surprises on the costs of premiums for policyholders like you.

Second, your insurance provider wants to get you back to good as quickly as possible. And let’s face it; it’s bad enough that something has happened to your home or car that requires repairs. Having to deal with the hassle of shoddy repair work shouldn’t be part of the process. Who hasn’t heard a story about a general contractor or car repair shop that not only messed up the repairs, but made the situation worse? Preferred vendors are vetted by the insurance companies and must meet stringent licensing requirements, certifications, and ongoing education expectations, while also maintaining a track record of satisfied customers. 

What they can do for you

If you’re weighing the pros and cons of using your insurance company’s preferred vendor, consider the perks they offer:

  • They save you the trouble of gathering quotes and assessing repair shops and contractors. Why shop around hoping to find the most qualified mechanic or contractor when someone else has not only vetted them, but they also have tangible proof of how awesome they are?
  • They save you time by arranging for a rental car and setting up appointments. Really, it’s like having your own personal assistant doing your bidding. 
  • They give you peace of mind by guaranteeing repairs. Where else will you get a warranty on repairs to your car or home? With service guarantees, you’ve got a written warranty that spells out all of the details, plus the insurance company will handle any issues that come up (if you happen to run into them later).
  • They save you (and other customers) money in the long run. Predictable repair rates and work that doesn’t need to be redone means improved accuracy when insurance companies set premiums. And keeping costs in check is a win-win situation.

What they can’t do for you

As good as they are, service guarantees aren’t magical genies, so be sure to read the terms and conditions of any warranties that come with repairs. The most common exclusions that would void a car or home repair guarantee include:

  • Regular wear and tear on your car or home
  • Damage due to environmental factors (like gravel chips on your newly painted car)
  • Modifications to repairs that are done by another vendor that’s not in your insurance company’s network
  • Abnormal use or improper maintenance
  • Subsequent damage or fire after repairs have been made
  • Vehicle parts that have a limited Original Equipment Manufacturer warranty (the insurance company won’t guarantee it beyond the OEM’s warranty)
  • Vehicle rust or rust repairs

The verdict

Service guarantee programs offered by insurance companies can really come in handy if you find yourself in a home or car claim situation. But if you really want the inside scoop, talk to a licensed insurance broker. They work closely with the companies that offer coverage in your area and can point you in the right direction.