Why it is important to enumerate damages

Damages come up in several contexts. There may be initial negotiation, and thereafter arbitration or court trial. Understanding different types of damages can help you address the tendency of warranty companies to reduce claims.

1. Direct Repair Costs

The basic element of damages is what you have or will have to pay to repair the car because of the warranty company's failure to do so. The basic elements of proof would be: the policy, request for coverage, denial, report or repair indicating what is needed, and proof of payment or invoice indicating the cost.

2. Consumer Fraud Triple Damages

Some states provide for triple damages. Typically, the law applies when proof of deception is seen. Note these laws in particular vary from state to state. The best source is a lawyer knowledgeable about warranty law in your state. Secondarily, you can try to research this on your own by using sources like Google Scholar or a legal book on deception such as the National Consumer Law Center's book, Unfair and Deceptive Acts and Practices (10th ed. 2021) (1,056 pp.) NCLC Digital Library.

The book notes most states have "a consumer protection statute broadly prohibiting deceptive practices. Many also prohibit unfair or unconscionable practices, and a few prohibit abusive practices. These UDAP statutes are consumers' main protection against unscrupulous businesses and can provide victimized consumers with effective relief. NCLC works to preserve, strengthen, and enforce these important laws."

In New Jersey, if a defendant is found to have committed an unconscionable commercial practice, the statute imposes treble damages and attorney's fees (N.J.S.A. 56:8-19). New York, in contrast, limits treble damages to what appears to be $100. What proof is needed will also vary from state to state.

3. Consequential Damages

The warranty company's failure to cover claims may cause other damages beyond the cost to repair.

A. Vehicle Rental
You need to rent another car because of the failure to cover the repair.

B. Loss of Use
Some courts have allowed damages for loss of use. This can be based upon the cost to rent an equivalent vehicle along with proof of other inconvenience.

C. Lost Wages
A lack of transportation can cause loss of wages or income.

4. Punitive Damages

Some companies may have widespread policies of soliciting policies and not paying claims that are so egregious and wrongful they constitute fraud. While compensatory damages are designed to compensate the consumer for an injury, punitive damages are designed to punish a wrongdoer and eliminate the financial incentive to deceive people.

“If the evidence reveals that the defendant profited from its wrongful conduct, we must consider whether the punitive-damages award removes that profit.” – Orkin Exterminating Co., Inc. v. Jeter, 832 So. 2d 25 (Ala. Sup. Court 2001).

5. Negotiation and Compromise

Note that simply because these damages are enumerated does not mean you will necessarily recover them or that a settlement will be based upon them. Many have seen difficult warranty companies unwilling to pay the normal costs, much less added damages.

Call for a Free Consultation on Your Warranty Claim

You may also like:

• Problems with Car Extended Warranties

• Hints on Filing a Claim Against a Service Plan or Extended Warranty Company

• Endurance Warranty Problems and Deception

• Endurance Warranty: Solutions for Misled Car Owners

• New Rules to Stop Annoying Robocalls: Why This Matters

Keywords: consumer rights attorney, small claims lawyer, insurance fraud