Purchased a used '04 automatic with 72k miles back in October of last year from a local dealer here in Houston, TX.

Because I was concerned as to how the previous owner maintained or drove the car, I decided to purchase a service contract from Continental Warranty back in March of this year. They were more than happy to take my money for the policy, car site unseen.

As luck would have it, the engine literally "gave up the ghost" on Labor day (@ 85k). I had it towed into a repair shop. A compression test was performed and the engine is supposedly shot (I don't have all the particulars yet on what was found).

As the repairs were going to be more than the original contract price of $2200, a claims adjustor was dispatched from the Warranty company to personally inspect the engine. Come to find out, an after-market mod to the airbox was found (Simota product). It was there when I purchased it (used) and similarly when the warranty actually went into effect.

Per the Warranty company, this is considered as a mod to the powertrain and therefore the claim is now being denied. Funny, but there is absolutely no definition in their contract as to what components are considered as part of the powertrain. Their baseless definition appears to be a very broad one. Per Mazda's original factory warranty, the airbox is not considered a powertrain component .

My question is has anyone experienced a similar situation. Also, does Magnusson-Moss afford any protection in this case (ie they have to prove that the mod/aftermarket part was the cause for the failure)? Do I have any legal recourse here?

The car has been in limbo at the repair facility now for about 2 weeks, so any advice would be greatly appreciated at this point.

 

I'm no expert... but I saw a very informative TV show where they discussed these "3rd party warranty" and basically they said the contracts are tailored to make it almost impossible to get anything covered. They showed how terms are purposedly vague so that almost anything breaking up on the car can be regarded as "not covered". The only cases were people were able to get some money was by suing the company... I sincerely hope you're not stuck with one of those scammers.