So 4.5 years ago, I purchased a used 2008 Jeep Grand Cherokee. Since I was buying used, I wanted protection in case it was a lemon so I bought an extended warranty that was good for 5 years and up to 100,000 miles.The warranty is still valid as the car only has between 80 and 85,000 miles on it.A few weeks ago, the car broke down. I had it taken to a repair shop. The said the engine was gone and needed to be replaced. I called up the warranty people and they said they'd send an inspector out to confirm.The inspector's report said,
The inspector wrote:[/b
"The inspector verified the serpentine drive belt is missing. The water pump shaft bearing is loose - likely caused the belt to come off. There is no coolant visible in the reservoir or radiator - coolant stains present. The left bank of the engine knocks during operation. The oil filter is old. There are no signs of impact damage. The oil is full and clean. There are no other failures seen or demonstrated.
Cause of Failure.
1) Material failure of water pump beaing with sumb-damage to the belt and engine.
Inspector's Opinion of Required Repairs
1. Repair/Replace the engine assembly."
So one would think they'd then pay to have my engine replaced right? No. They said they replace just the water pump or belt or something like that. I was like, "Can I drive the car if that happens?" They said most likely not.
I said well the warranty says you will replace the engine.The admitted th engine is covered but they said their exclusions. Overheating is excluded. I understand the logic behind that because if f I drove a faulty car and ruined the engine then obviously they wouldn't want to cover that.
So I said, "Whats the next step?"
They wanted me to pay to break the engine down to the point of failure so they could figure out if they were responsible for the repairs. I believe I was told this would cost $1-$2,000.
I was like "That's absurd. Why would I spend 2 grand and then find out I still need a new engine which will cost a lot more ( A remanufactured engine costs like $7,000 - a used one $3,4000.). My mechanic and your insprector both agree this engine needs to be replaced. You need to replace it."
They kept saying no. I kept telling them. Look if I have home insurance and my house burns down. You are responsible for rebuilding it. If you are claiming that you don't have rebuild it because I'm at fault (arson), then you are the one responsible for proving arson, not me.
They kept telling me they wouldn't do anything.
I then found the name and direct line to their lawyer. I left him a message and said I would be proceeding with having the engine replaced. I told them the contract stated I had to pay to have the car diagnosed and I had done that. Both my mechanic and their inspector had agreed the engine needed to be replaced and thus I'd be replacing it. I told him it wasn't my duty to pay to determine the cause of the failure. If they wanted to do that, that was on them. So I told them I'd have the engine replaced and I would be filing for arbitration (the contract says all disputes need to go through arbitration).
This got their attention. Immediately, they called me back and told me to hold on. They told me they'd called the shop and had agreed to pay the shop $250 to do a limited breakdown to see the cause of the failure.
Today, they called me back. I guess they can't pin me for the failure as their offer has increased.
I don't have a copy of the actual new inspection report but they emailed mea summary that said the inspection report determined "the lower end of this engine is in good condition and no failures was demonstrated indicating an upper end issue, possibly timing chain or lifters. However this could not be verified due to lack of teardown. These type of repairs typically cost $1200.00."
The guy said the repair shop had already told them they won't do a repair like that and wanted to know how I wanted to proceed. They said they were willing to pay for the $1200 in repairs, if I can find someone who will do that, or they will give me $2000.00 towards replacement of an engine as long as I sign a statement agreeing not to go to arbitration.
His concluded, "(Blank company) is making this offer to prevent further delays with your vehicle and to come to a reasonable agreement. Please review this information and let me know how you would like to proceed."
When I spoke with him "Well it sounds like, you can't pin this on me. Thus you've upped your offer. But it also sounds like if I do $1,200 in repairs, that won't solve the problem and I'll still need more work."
So if you were me, what would you do.
I see my options as.
1) Try to find someone who will do the $1,200 in repairs. I doubt that will fix the problem and they'll still ulitmiately have to replace it. Thus this will take forever.I dont think this is a good idea at all.
2) Have the engine replaced on my own and fiile for arbitration
3) Make a counter offer. Maybe split the difference between $2000 and a used engine?