Buying a used car warranty? Make sure it’s underwritten, understand?

There are many ways to show that you own or agree to something: you sign a document, you put your initials alongside a paragraph or two or, more recently, you use a personal PIN number to agree to a purchase (let’s not get into contactless...)

But how about writing your name under something? Well, that’s what underwriters used to do, and it’s how the term came about.

The name ‘underwriter’ was coined in the mid-18th century at the time of the Industrial Revolution, when insurers wrote their name under the total amount of risk they were prepared to take... in return for a premium of course.

It provided support, risk management and peace of mind to both insurer and insured alike, keeping business moving and everyone covered.

So, in a present day setting, if you’ve bought yourself a new car you’ll quite rightly expect some kind off warranty to cover you in the event of a mechanical breakdown or failed part. That will usually give you at least three years of cover.

But after that, what next? It’s time to consider a used car warranty of your own. And while car makers may well propose extended warranties, it’s worthwhile checking out what specialist warranty companies can also offer you.

Used warranty policies for your pride and joy are not small purchases and should be considered carefully not least because you want to be sure that, should you need to make a claim for a repair and some parts, you really are going to get the cover you expected.

And making sure your warranty provider is backed by an insurance underwriter is a great way to guarantee this. You want to be sure that your warranty company has the necessary resources to pay out for your claim when you need it ‐ especially if the repair bill is looking on the high side.

Underwriters are specialists in their field of insurance, analysing the ‘risk’ involved in providing car warranties, and balancing the interests of the end consumer with fair premiums, while ensuring that sufficient funds are set aside if a claim has to be made.

A warranty from a provider that’s not underwritten is risky as it means you could be getting cover from a company that can’t ‐ and isn’t required ‐ to show they have the financial backing to pay claims, and they could refuse to pay out for your vital repair work, just when you need them most.

It’s a fundamental part of insurance and warranty delivery, and ultimately, if you know you have the backing of a good underwriter, everyone wins.

It’s as simple as writing your name under it...

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