Claims handling is the process by which the warranty administrator identifies and authorizes repair work under a service contract and makes payment. Understanding that process before you buy can be an important determinant of your overall satisfaction.

Authorization: Find out if you need prior authorization from the contract provider for any repair work or towing services. If you need prior authorization, find out:

• How authorization is attained e.g., phone, mail, etc. If by phone, what are the normal business hours? How is authorization attained in emergency situations outside these business hours? The FTC even advises consumers to test the toll-free authorization numbers prior to signing the service contract.
• How long authorization takes.

Payment: You may have to pay for covered repairs and then wait for the service company to reimburse you. If the auto service contract doesn't specify how long reimbursement usually takes, ask. Find out who settles claims in case you have a dispute with the service contract provider and need to use a dispute resolution program.