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GM bankruptcy won't affect car repair insurance

Companies selling a type of car repair insurance called extended service contracts will continue to honor the contracts on cars from General Motors, including for vehicles that will no longer be made by the company.

The recent announcement that GM would file for Chapter 11 bankruptcy and sell off some assets, close dealerships and discontinue some brands has concerned consumers whose vehicles are no longer covered by the manufacturer's warranty. Many car owners opt to buy car repair insurance or extended warranties.

But the Service Contract Industry Council (SCIC) said that consumers should not worry because extended service contracts are backed by highly-rated insurance companies that are regulated by the state insurance commissioners.

Timothy J. Meenan, SCIC's executive director, said owners of GM vehicles can still bring their cars to authorized GM dealerships that accept car repair insurance.

"Like repair work done under both GM manufacturer warranties and extended service contracts, any claims filed under third-party extended service contracts also can be performed at authorized dealerships or other authorized repair facilities," Meenan said.

The manufacturer's warranties on vehicles still covered by the original terms will remain in effect as well, due to the federal government's Warranty Commitment Plan, insurance experts say.

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