Extended Service Contracts

From time to time, the question always comes up - "Should I purchase an extended warranty for my D?". I will give you some pointers and items to think about, and then you can decide.

First, let's get something straight. In almost all cases, you are not buying an "extended warranty". What you are buying is almost always an "Extended Service Contract (ESC)". There are some MAJOR differences between a warranty and a service contract. Of course, the reasons and legalities for this are heavily weighted in favor of the service contract company.

I will not go into all the legal issues regarding a warranty vs a service contract, but there is one very important distinction that you should be aware of. Almost all ESC's have a clause that states the contract is void if you do ANY modifications to the engine, transmission, and sometimes, even change tire sizes. SO - those of you contemplating a Banks, Dr Diesel or similar engine performance upgrade - or just thinking about upsizing to a 255 size tire for increased load capacity - had better check your ESC as this will likely void your contract.

DO I REALLY NEED AN ESC?
That is a hard question to answer. Certainly, the D (or any RV) is a complicated machine, with MANY things that can go wrong. However, let's look at two scenarios:

Scenario 1:
You have a D that is either out of warranty or almost out of warranty, and the "components" - such as the refrigerator, furnace, etc - are or will be out of warranty. (NOTE - if you want an ESC, you will save big money if you purchase your ESC while you are still in warranty, with most companies). Most likely, the engine is still under warranty, but everything else is out of warranty, or will be soon. In this case, an ESC "may" be a good idea - at least it will give you peace of mind. But, it is important that you purchase the right kind of ESC, as will be discussed later.

Scenario 2:
Your D is virtually new. The engines and transmissions on new D's are warrantied for five years and the Freightliner chassis is warrantied for three years. Most of the other components - such as the refrigerator, stove, awning, etc - are warrantied by their manufacturer for three years. Fleetwood's basic warranty is one year on the coach, three years on delamination and 10 years on the roof (warrantied by the roof vendor). Unless you plan to keep your D well beyond three years, an ESC probably will not make sense.

CHOOSING AN ESC PROVIDER

The key items here are COVERAGE and PRICE.

Almost all ESC contracts exclude damage done by WATER. This means that you may not be covered for any consequential damage if your roof leaks, and you certainly will not be covered for any delamination, which is really expensive to fix!

Most ESC contracts only cover items specifically mentioned in their contract. This is called an "inclusionary" policy, and it should usually be AVOIDED. Obviously, there are many items in an RV, and you can bet that some of the expensive ones are left out of this type of policy. Besides, you really don't want to be in an argument about what is or isn't covered.

This is why EXCLUSIONARY ESC policies are usually more favorable for the consumer. In this ESC, everything is covered EXCEPT those items specifically mentioned as being excluded from the coverage.

In either contract, you will find language that excludes their liability for a "covered part" due to the failure of an "uncovered part". As I said before, the purpose of these Extended Service Contracts is to make money for the underwriter! So, if your hose clamp fails (uncovered part), resulting in the failure of your engine (covered part), the ESC company is off the hook!

Also, almost all ESC's state that you must obtain their approval for the repair BEFORE ANY repair work is started. This is a very important point that has "caught" many an RV owner. Be advised, if you follow the terms of your contract PRECISELY, your ESC company will not pay - and it is right there in the contract that you signed.

You will likely find out that your ESC company will try every trick possible to avoid paying a claim. Recently, a plastic hinge failed on my refrigerator, so I called DFS, my ESC provider. This is one of the exclusionary contracts, which usually is the kind to buy. However, DFS came up with a clause in the contract that stated that "doors" are not covered under warranty. It seems not to matter that my refrigerator is covered, but they claimed that ANY door is NOT covered. Needless to say, I will NOT purchase anything from or recommend that anyone else purchase an ESC from DFS.

Also, you will have to provide documentation that you followed ALL preventative service procedures AND that you can document the service. This means saving all your receipts. It is unclear how this would be handled if you do your own maintenance work.

Last, if you decide on purchasing an ESC, be sure that you purchase one that is underwritten by a reputable, financially stable, NATIONAL company. In most states, you will have specific legal rights depending on the state in which the policy is written. In some states, the selling dealer is responsible for continuing the terms of the ESC if the underwriting company declares bankruptcy.

So, after reading this you probably think that I don't have an ESC. Wrong - with my luck, I will probably "lose" financially either way, but at least I know what the ESC cost. My policy is and exclusionary policy underwritten for Deutsche Financial Services ($100 deductible, 7 years, 70,000 miles). Although I have not had to use it yet, I at least have peace of mind knowing that I am covered for most calamaties.

- Submitted by Bob Cook