Fidelity Warranty Services — Stiffs policyholders on claims
First, understand who this company is. Fidelity Warranty Services (and Courtesy Insurance Company) is essentially owned by Southeast Toyota or “SET.” SET is the company that holds the monopoly on all rights to Toyota franchising south of Maryland and east of Texas. Said another way, SET is essentially the ‘boss’ of all the individual Toyota dealerships in the Southeast region (since they can take away their franchises). The street address for Fidelity Warranty Services (and Courtesy Insurance Company) is Jim Moran Boulevard in Deerfield Beach, Florida. Jim Moran is the original CEO of SET … which is based in Deerfield Beach, Florida. Get it?
Why this concerns you is that, if you buy a Fidelity Warranty Service product from a Toyota dealership in that region to protect a vehicle you bought at a Toyota dealership in that region, when it comes claims time, you will be asking that Toyota dealership to help you make a claim against its own ‘boss.’ I wish you good luck on that one. Your premiums basically went right on into SET’s pockets (less the sales commission). Then when/if it does have to pay out, SET is essentially a ‘self-insurer’, paying only the volume wholesale rate for parts … and likely paying its captive dealerships for labor at a vastly reduced price. Nice racket, eh?
That conflict of interest is in addition to the unfortunate fact that insurance companies often tend to try to wiggle out of paying valid claims anyway. But in the situation described above, you won’t even have the dealership on your side to advocate your valid claim.
According to many Internet complaints, Fidelity is quite adept at denying claims. The Fidelity contract IS short and written in plain English, so the average person can read it very, very carefully. (I didn’t.) Do so - that’s YOUR responsibility and Fidelity has made it easy for you to read it. You will find it filled with carefully-crafted clauses. Many are quite fair. However there are a number of clauses that will pretty much allow Fidelity a thinly-veiled excuse to deny whatever claim it feels like denying.
Here’s one: You are not covered for “the failure of a covered part due to a gradual reduction in operating performance as a result of normal wear and tear” after 50, 000 miles. If a part fails after 50, 000 miles, well that’s just normal for it to wear out, right? Claim denied at will.
Or how about this one? You are covered only if the failure is due to “faulty workmanship or materials supplied by the original vehicle manufacturer.” Did that turn signal stalk break right off in your hand? That’s not faulty workmanship, you broke it, you klutz. Claim denied at will.
And here’s some other items specifically excluded by contract under Fidelity’s tip-top “Platinum” coverage - which the policy salesman will try to sell as protecting everything but the kitchen sink … body parts & body panels & molding & door handles & locks & glass & lenses & paint (that pretty much excludes the exterior), trim & upholstery & bright metal (that pretty much excludes the interior), hinges, transmission clutch components, radiator hoses, advanced cruise control systems, ‘appliances’ (whatever that means), back up alarm systems, convertible tops, rattles, squeaks, wind noise & water leaks (from poorly sealed windshields, for example) and even safety restraint systems.
And it also excludes repair of ‘correction of excessive oil consumption’ or ‘any reduction in engine efficiency.’ Engine problems? Claim denied at will.
Google around - and you’ll find more than a few individuals saying that failed parts – parts specifically listed as covered in the Fidelity Warranty Services contract - were outright denied without the agent even bothering to cough up an explanation. Why didn’t they bother to explain? Because they don’t have to be bothered - they’ve got their clauses to wiggle around in if they actually feel the need to provide an explanation. But that would be wasted breath and wasted time, since what are you, the consumer, going to do about it anyway?
You can forget about complaining to the BBB. These days, the BBB pays its utility bills with the hefty annual dues that come from the corporations who become its members. The Southeast Florida BBB currently rates Fidelity Warranty Services as A+.
Oh, and for all those people fussing that they are going to sue and are going to get a class action lawsuit going, well they can just forget that idea also. The Fidelity Warranty Services contract clearly states “You agree that all … claims arising … are subject to neutral binding arbitration … Any claim or dispute is to be arbitrated on an individual basis and not as a class action. You expressly waive any right to arbitrate a class action or in a private attorney general capacity …”
There’s a reason why so very many corporations these days are inserting arbitration clauses into their retail contracts … and you can be sure it’s not because arbitration is a fair shake for the aggrieved consumer. The courts are, in theory, bound to decisions based in law. Arbitrators are not. Unlike the public court system, arbitration is a private business. And guess who the arbitrators’ customer is? Guess who pays arbitration fees day-in, day-out, year-after-year? Not you, the lowly individual consumer, but the corporations – the very same corporations who actually create the demand for arbitrators through their contracts. Checkmate.
If this situation has outraged you, then probably the most effective thing you can do about it now - since you’ve already flushed your money down the toilet - is to tell your Congressmen to back the current administration’s attempt to outlaw arbitration clauses in all retail contracts. That is unless you actually think it’s a wise idea that any and all corporations with which you have to do business should be allowed to set themselves entirely above all law – and then do to you (and everyone else) whatever they please. Without arbitration clauses, corporations would tend to treat consumers somewhat more fairly, since it would be in the corporations’ financial interest to do so. It would, in many cases, be cheaper to simply honor the contractual obligations - than to shell out legal costs, fight class action lawsuits, etc.