Some drivers assume that an auto service agreement, vehicle warranty, or auto insurance all provide the same or similar type of protection. They don’t. Auto service agreements and warranties are not auto insurance. Understanding the difference can help you avoid unexpected expenses and ensure you’re covered when you need it most.

Auto insurance is designed to protect you financially if you’re involved in an accident, your vehicle is stolen, or it is damaged by covered events such as hail, fire, or vandalism. Depending on your policy, it may also cover injuries and damage you cause to others. Our office may be able to help with your auto insurance claim depending upon the claim circumstances and claims amount.

In 2025, Arizona’s Legislature raised the small claims court jurisdiction amount. Any claim amount less than $5,000 now falls within Arizona’s small claims court jurisdictional limits. Attorneys are not allowed to practice in small claims court. Any claim amount less than $10,000 falls within Arizona’s justice court jurisdiction. Most insurance bad faith attorneys, including our office, do not handle cases that are in Arizona’s justice courts.

Vehicle warranties and auto service agreements help cover the cost of certain mechanical repairs or replacement of covered vehicle components due to defects or normal wear, depending on the terms of the contract. They do not pay for accident damage, liability claims, or losses caused by theft or weather. These agreements often include a binding arbitration clause.

Our office does not help with auto service agreement or warranty disputes. These claims would be better addressed through a consumer rights or consumer protection attorney. And, under certain circumstances, a lemon law attorney might also be able to help with these matters.

Think of it this way: Auto insurance protects you from unexpected accidents and covered losses, while warranties and service agreements help protect you from certain repair costs. They serve different purposes.

Before you assume you’re covered, take a few minutes to review your auto insurance policy, and if any, also review your warranty or service agreement. Knowing the differences between them and what each one covers can save you time, money, and frustration down the road.