Beyond warranty: Understanding policy adjustments

July 10, 2017
Trucks and the components that go on them come with warranties that have stipulations about length either in years, miles or hours and they are not concurrent.

The Business Dictionary defines warranty as: a legally binding assurance that a good or service, is among other things, (1) fit for use as represented, (2) free from defective material and workmanship, (3) meets statutory and/or other specifications. A warranty describes the conditions under, and period during, which the producer or vendor will repair, replace or otherwise compensate for the defective item without cost to the buyer or user.

It’s pretty cut and dried, or at least appears that way. Trucks and the components that go on them come with warranties that have stipulations about length either in years, miles or hours and they are not concurrent. Once the warranty period expires, the truck or parts manufacturer has no legal responsibility to pay for repairs.

Policy is another matter, and policy adjustments are often made by service providers or manufacturers for recurring issues or subsequent failures.

Let’s suppose you have a warranty on a truck for 5 years and 500,000 miles. At 200,000 miles the truck fails and the manufacturer pays for the repair. Then at 400,000 it fails again, and again they fix it and pay for it. But then it fails again at 523,000 miles for a related, similar failure.

Since it is a known failure, it is likely that the manufacturer will make a policy adjustment based on what is called “progressive damage,” especially if the subsequent damage can be tied back to the earlier failures.

Policy adjustments are not always well defined. Sometimes the manufacturer will pay for the parts and you will have to pay for the labor. Other times they will pay for the labor and you will have to pay for the parts. Sometimes, based on the mileage, adjustments may be pro-rated.

Basically you should think of policy as a negotiable extension of the warranty.

In order to have a chance at getting a manufacturer to make a policy adjustment, you need to keep meticulous records on the work that has previously been done under warranty. You need to be sure that you are following the manufacturer’s suggested PM intervals to the letter.  You also need to know the warranty period from either the Original Equipment Manufacturer (OEM) or the component supplier and the specific work that was completed during the period the truck or component was covered under warranty so you can look for a natural extension beyond that period.

Policy is shrouded under the theory of “reasonableness.” Before speaking to the manufacturer about making a policy adjustment, ask yourself if it is reasonable that the current problem is the result of the previous ongoing problem that was covered under warranty.

The best way to go about getting a policy adjustment is to first have a very good working relationship with the manufacturer’s rep who is assigned to your account. Keep him/her aware of what is going on throughout the life of the vehicle. Chances are you are not the only one experiencing these problems.

You also need to pay close attention to any service bulletins, campaigns and recalls from the manufacturer. You must be in compliance with those recalls and make sure you have them completed during the required time period.

It is more likely that if you have taken care of the truck, documented all of the prior problems and completed any recall protocols that the manufacturer will be open to making a policy adjustment for you.

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