Insurance News


April 24, 2009

State Insurance Department warns of misleading

Jefferson City, Mo. - The Missouri Department of Insurance is reminding consumers not to be misled by junk mail or telemarketing calls urgently warning that their factory car warranties are about to expire. Most Missourians are familiar with the postcards or phone calls, which often appear to come from a car manufacturer or dealer, selling an extended "warranty" or service contract.

Consumers often receive these mailings shortly after buying a car. Other consumers who don't even own a vehicle have reported receiving the mailings or calls.

"Consumers are being led to believe their auto makers are contacting them, offering to extend their factory warranties," said Director John M. Huff of the Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP). "In fact, these sales pitches are not from the manufacturer, but from a third-party company that does not know when a car's factory warranty expires."

The products being sold are actually not warranties, but service contracts. Under Missouri law, a warranty is provided by a manufacturer of a product and included in the original sale price. Service contracts provide maintenance service in return for a fee, either monthly or paid up front.

The DIFP offers these tips for consumers who receive service contract solicitations:

Tips for consumers considering buying a service contract:

Consumers who suspect fraud or have questions or complaints can contact the DIFP's Consumer Insurance Hotline at 1-800-726-7390 or visit

About the Missouri Department of Insurance, Financial Institutions & Professional Registration

The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals. The department's seven divisions work to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.