An extended warranty is an agreement between the car owner and warranty company, obligating the warranty company to pay for repairs covered by the contract for a specific period of time.
With an extended auto warranty you are protecting yourself from the unexpected cost of mechanical failure. One major repair often ends up costing as much, or even more than the entire cost of the warranty.
As a consumer, you can only accurately understand the coverage if you learn the terminology and standard industry requirements. The levels of coverage offered differ considerably from company to company. Most states (36) do not regulate the coverage, and there is quite often jargon and restrictive language buried in the contract.
Read the information on this website to educate yourself on extended warranties, especially the Frequently Asked Questions, Your Benefits and Questions to Ask.