A service contract for a vehicle or a home system often does not pay a repair directly. Many contracts add a step in the middle: someone must approve the claim before the shop starts covered work. That step is called preauthorization in many contracts, and its wording decides whether a repair goes ahead on the day the item fails or waits on a phone line. Read this step before you sign, not after the breakdown.

Find the approver

The contract should name who approves a claim. It may be the administrator, the provider company, a claims office, or a separate firm. The name on the cover page is not always the name that decides. Ask who holds approval power, how to reach that office, and whether a request can be made online, by phone, or only in writing. Copy that route into your own file so you and the shop use the same one.

Ask what happens before the repair is agreed

Many contracts say the shop may not begin covered work until approval is given. Ask what the shop should do if it finds a fault while it is still looking. Some contracts allow a teardown or diagnosis to find the cause, and others say nothing about who pays for that work when a claim is refused. Ask whether diagnosis time is covered when the claim is approved, and whether it is covered when the claim is denied. If the contract is silent, put the question to the seller in writing before you pay.

Ask about the clock

A clear contract states how long the approver has to answer a request. If it gives no period, ask for one in writing. Ask also what happens if no answer arrives in that period, and whether the shop may then proceed on stated terms. A claim that waits with no stated limit is one of the ways a breakdown turns into a long stretch without heat, power, or transport. Record the time of each request and the reference number the approver gives you.

Check the shop and the emergency rule

Some contracts require a shop from a list the provider keeps, or a licensed shop of the owner's choice. Read which rule applies. Then read the emergency rule, if there is one. Contracts often allow work to start without prior approval when an item is unsafe to use or when a home loses heat, water, or power. The conditions for that exception are usually narrow. Find out what counts as an emergency under the contract, what record the shop must keep, and how the approver is told afterward.

What to write down before you sign

  • Who approves each claim, and the route to reach that office.
  • Whether approval must come before any work, including diagnosis.
  • Who pays for diagnosis or teardown when a claim is approved, and when it is denied.
  • How long the approver has to respond, and what happens if the answer does not come.
  • Whether the shop must be on a list, and how to check that list.
  • What counts as an emergency, and how the approver is notified afterward.
  • Where the approval reference is recorded, and who keeps the copy.

Where the rules come from

Service contract rules differ from state to state. This guide has not read the statute of any particular state on the approval step. The state pages on this site name the regulator, cite the statute or program, and say whether a roster is published. The Florida service contract rules and roster page shows that layout as one example. Use the page for the state named in your contract, then confirm the wording against the contract itself, since the contract sets the claim route you will actually use.