Photo from Unsplash

Originally Posted On: https://www.1800thelaw2.com/resources/vehicle-accident/carshield-class-action-lawsuit-1800thelaw2/

 

When you purchase any type of warranty or insurance policy, you anticipate that the company you are doing business with is fair, reliable, and trustworthy. You expect them to perform under the terms of their contract, and rightfully so. You anticipate that they will abide by their own contract.

However, far too many learn the hard way that these expectations aren’t always reality. Insurance companies often give claimants the runaround and unfairly deny their claims. If you purchased a CarShield warranty for your vehicle and experienced a wrongfully denied claim, you could be owed compensation. It’s in your best interest to speak to an experienced attorney about the specifics of your circumstances.

What Is a CarShield Class Action Lawsuit?

A CarShield class action lawsuit allows one or more plaintiffs (wronged parties who bring the lawsuit) to file a lawsuit on behalf of a larger group of plaintiffs, usually called a class. Class action lawsuits help courts manage multiple cases that would otherwise prove unbearable for the court to handle if they were required to join the lawsuit as a named party. Any settlement or court award money from a class-action suit after its legal fees are paid is shared among all class members. Class representatives typically receive more for their time, and class members usually get an equal share.

Is There a Class Action Suit Against CarShield?

Yes, CarShield is currently a defendant in a class action lawsuit and may also soon face others. A class action lawsuit was filed against CarShield in May 2017, alleging misleading consumers through advertisements and violating the Driver’s Privacy Protection Act of 1994.

In addition, CarShield recently filed a lawsuit against the Better Business Bureau, or BBB, claiming the nonprofit organization unfairly rated CarShield. CarShield currently has an “F” BBB rating, along with over 1,500 CarShield complaints.

Does CarShield Pay Their Claims?

While not yet another class action suit, there are multiple CarShield lawsuits filed CarShield claimants have filed suit against the company for refusing to pay on covered claims or unfair demands.

CarShield Lawsuit Example: Car Engine Starter

For example, Devonna Hopkins of Philadelphia filed a CarShield lawsuit for requiring her to pay for her vehicle’s engine to be completely broken down before they would even consider paying her claim. Under the contract, Devonna was simply obligated to pay for diagnosing the problem, her starter. However, the mechanic determined it wasn’t the starter after all, but failed main bearings. American Auto Shield, CarShield’s claims administrator, refused to pay unless the engine was dismantled entirely, and only then, under certain circumstances.

Ms. Hopkins isn’t alone, as at least dozens of other vehicle owners across the nation have had similar experiences and complaints with the car warranty company.

Why Does CarShield Have So Many Complaints?

There are hundreds, if not thousands, of CarShield reviews and complaints in 2022, indicating a pattern of complaints involving several different factors. Common complaints are:

• Pushy or misleading sales and advertising
• Failure to pay covered claims
• Difficulty canceling policies
• Rude CarShield representatives

CarShield Reviews and Horror Stories

Customer Review: New Transmission Claim

Ms. Hopkins isn’t the only one whom CarShield misled. There are many more stories like hers across America. For example, after Atlanta’s Joseph Weatherspoon’s warranty expired on his 2016 Chevy Impala, he became a CarShield customer. Several months later, when his car failed to go in reverse, he thought the problem would be covered. After taking his car to the dealership, he learned that it needed a new transmission as the clutch pack inside had failed. However, Car Shield denied Weatherspoon’s claim saying that clutch packs aren’t part of the transmission and therefore aren’t covered under his vehicle’s warranty. After many phone calls and being transferred from one person to the next, CarShield finally agreed that the clutch pack was part of the transmission. But they still wouldn’t cover a new transmission or repairs, saying that because a clutch pack couldn’t be the reason the transmission failed.

Thankfully, after reaching out to WSB-TV2 Atlanta, his claim was accepted, and he received a repair check for $42,000. “It feels like they had the intent of not paying that claim. They were looking for one way or another to get out of paying that claim,” Weatherspoon said.

Customer Review: Electrical Claim

April Grant of Aurora, Colorado, shares a similar story. She purchased CarShield’s highest package, the “Gold Package,” for $139 per month. Then, in December 2020, her car broke down, and all the lights on the dashboard lit up. Thankful that she had CarShield, she took her vehicle into the shop and filed a claim. However, they also denied Ms. Grant’s claim because it doesn’t cover electrical components.

Customer Review: Warranty Is Not Honored

Another Denver area CarShield customer, Lorie Jackson, said she spent hours and hours on the phone trying to get CarShield to honor her warranty. “I was diligent, or I never would have seen the money.”

Customer Review: Engine Repair Claim

Vanessa Sanchez shares a similar story with Ms. Hopkins. After a mechanic diagnosed her vehicle with a blown engine, CarShield requested that it be dismantled, leaving Sanchez to cover the labor costs if CarShield subsequently determined they wouldn’t pay for the repair.

Company Review: Terrible Customer Service

It’s not just CarShield claimants that are experiencing problems. Lori Williams of Gary’s Full Service Auto Repair in Aurora reports dealing with four CarShield or American Auto Shield claims in a single year. None of them went smoothly, all involved a delay, partial payment, or denial. Williams also reports that:

• One representative would deny a claim; when she called back, a different one would approve it
• CarShield insists on outsourced parts or would only cover some parts
• CarShield doesn’t tell their customers that they won’t pay for programming a part once it’s installed

Who Accepts CarShield?

It’s up to each service shop and mechanic if they will accept CarShield. Some did accept it, and now don’t, due to their customers having issues with their coverage and getting their claims paid. Suppose you have a vehicle service contract through CarShield. In that case, you can take your car to a Shield Repair Network repair facility, or choose your own ASE-certified repair facility or dealership.

Who Owns CarShield?

MepCo is the parent company of CarShield, a private company. Mark Travis owns MepCo, and is also the CEO and President of CarShield. CarShield is based out of Missouri, and their claims administrator, American Shield Auto, is out of Lakewood, Colorado.

Who Is the Carshield Spokesperson?

The current spokesperson is Vivica Fox, whom you may have seen featured in television commercials promoting their insurance services. Iced T used to be their spokesperson and was also in their commercials.

Why is CarShield Not Available in California?

Many top car extended warranty providers, like CarShield, have excluded California from their coverage areas. This is mainly because of California’s strict regulations about vehicle service contracts. While these laws can make it harder to find extended warranty coverage for a vehicle, they protect insurance consumers from companies that may take advantage of them and not fulfill their end of the contract.

Is CarShield a Legitimate Company?

CarShield.com is a legitimately operating insurance company for automobile repairs. It boasts over 2 million contracts sold, 17 years in business, $1 billion in claims paid, and currently over 1,000 employees. A company being legit doesn’t mean that it is trustworthy, or that it treats consumers as it should. Legitimate companies break the law, and are unfair to their customers every day. Based on multiple consumer CarShield complaints, BBB complaints, and other sources, CarShield.com has substandard customer service and underperforms, or fails to perform, the terms of their contracts.

Alternative Car Warranty Companies

Some of CarShield’s competitors include:

• Endurance
• Carchex
• Autopom
• Concord Auto Protect

Insurance policies through CarShield depend on the type of coverage desired and the mileage, year, make, and model of the vehicle they want to cover.

CarShield Prices

How Much is CarShield?

Generally, coverage premiums can run between $100-$300 per month or around $1,200-$3,600 per year. There are six different plans available with different deductibles and various service levels.

They offer a 30-day full refund if you decide to cancel your policy. Suppose you cancel after the first 30 days. In that case, you can get a prorated refund for the amount of time left on the policy under most circumstances. You need to contact customer support and submit a policy cancellation notice to cancel.

CarShield states that it won’t cover:

• Modified or altered parts
• Wear-and-tear vehicle components such as brake pads and air filters
• Claims arising from acts of nature, collision, vandalism, or lack of proper maintenance

Is CarShield Going Out of Business?

While there are countless complaints and bad reviews, as well as a CarShield class action lawsuit, CarShield.com does not appear to be going out of business anytime soon. They are alive and well, still promoting their extended warranty insurance contracts.

Do You Have Questions About CarShield and Your Legal Rights? Connect With a Lawyer Today at 1-800-THE-LAW2.

Having your vehicle covered by an extended warranty can provide you with peace of mind. However, if you must fight with the insurance company to use the coverage you have paid for, it can quickly become quite frustrating. If you were a CarShield customer and this happened to you, it’s imperative to know that you have rights. You can connect with a lawyer today by filling out our form. An experienced attorney with 1-800-THE-LAW2 will call you within 10 minutes to discuss your questions and concerns.