1. Using Maintenance
  2. How You Manage Warranty Claims and Entitlements

How You Manage Warranty Claims and Entitlements

Warranty Claims are used to submit a request for reimbursement of asset repair costs to a supplier warranty provider. Claims are created in the context of a maintenance work order for an asset, and its related assets, that are covered under supplier warranty.

Claims are primarily created using a scheduled process. However, claims can also be manually created to split an existing claim, allowing you to submit certain costs for reimbursement to a different warranty provider.

Claims can be created only for work orders that are identified as a warranty repair. During work order creation, the checkbox will be set to “yes” on a work order header if one or more active contracts are found. The checkbox can then be manually set to “no” if the repair is determined not to be covered under warranty. After work order completion, this indicator will be used by the scheduled process Generate Supplier Warranty Entitlements to determine if warranty claims should be created or not. The results can be reviewed using the output log of the scheduled process and by querying the results from the Warranty Entitlement and Warranty Claim REST APIs.

Warranty Claims Entitlements

For a warranty repair work order (checkbox is set to “yes”), the scheduled process will review each work order operation transaction to determine if it is covered under warranty or not. During this review, the process will verify if one or more active warranty contracts for the work order asset, or its related assets, will cover the transaction cost or not for reimbursement:

  • If the transaction is covered, a claim entitlement is created that references the warranty contract. This entitlement is then used as the basis of creating a warranty claim against the contract’s warranty provider. The entitlement will reference the earliest expiring contract.
  • If a transaction is not covered, a claim entitlement is also created, but without a warranty contract reference. It will not be associated to a claim as reimbursable. However, the entitlement can be later updated as covered by warranty and associated to a claim for the same work order.

As each subsequent transaction in the work order is reviewed, additional entitlements may be created and associated as reimbursable for the same claim, or even a different claim, or marked as not reimbursable. If all entitlements are created for a work order as not reimbursable, then a claim will not be created by the process. In this case, you can edit the entitlements to associate them to a manually created claim to resolve any data mismatch issues.

Entitlements will include the transaction costs once a work order has been successfully costed. By default, these costs will provide the basis for their reimbursement costs in a claim. The original costs can’t be edited in an entitlement; however, the reimbursement quantity and unit cost can be updated to reflect the requested amounts if they are different than the standard costs. The scheduled process Generate Supplier Warranty Entitlements will update existing entitlement costing if they were created before costing was completed.

Entitlements may be created that reference warranty contracts for different providers for the same work order. In this scenario, multiple claims may be automatically created for a work order. Each claim will only have its matching entitlements associated by the common warranty provider.

Warranty Coverage For Material and Resource Transactions

A warranty coverage has optional indicators that guide if entitlements are created or not for resource and material transactions. Based on their values, entitlements may or not be created:

  • Labor Reimbursement – if this indicator is set to “yes”, then resource and equipment transactions are eligible to create entitlements that are covered under warranty and associated to a claim. Else, entitlements are created but not associated to a claim.
  • Parts Reimbursement – if this indicator is set to “yes”, then material transactions are eligible to create entitlements that are covered under warranty and associated to a claim. Else, entitlements are created but not associated to a claim.

Matching Transaction Coding

During work order creation, if the asset or its related assets are found to have active warranty contracts that use repair transaction codes in their base coverage, then the Match Transaction Codes checkbox is set to “yes”. In this case, it is expected that during the claims process only transactions that are covered by matching codes in warranty contract will be considered warranty.

If coding is defined in the warranty contract base coverages, it is also expected that coding will be defined in the standard operations used to create work order operations. In this case, operations, items, and resources will have repair coding included during created. Before the completion of the first operation, you can update the Match Transaction Codes checkbox to “no”, regardless of coding on the operations. This setting will disregard warranty entitlement validation by coding in the claims and entitlements process. If coding was not defined in a standard operation or manually created operations are defined, you then you can optionally select coding at the operation, item, and resource levels.

For example, you have an operation transaction for an item that is being consumed in order to repair the brake system on a vehicle. The item has a code value that indicates it is part of a brake system. The transaction will be validated by the claims and entitlements scheduled process as follows:

  • If work order asset or related assets has one or more active contracts as of the work order start date, then verify if one or more contracts has a code in their base coverage that matches the transaction.
    • If a match is found, create an entitlement, and reference the first expiring contract, and include in a claim for the work order by matching warranty provider
    • If a match is not found, then create an entitlement, don’t reference a contract, and exclude it from any claims for the work order

If coding is not used, or the Match Transaction Codes checkbox is set to “no, then the warranty claims and entitlements process will not use coding to validate warranty contracts. The entitlement will reference the earliest expiring contract.

Standard Repairs and Costs

Entitlements created for a warranty claim will include transaction costs based off the item, resource or equipment cost setups. For each operation, you may wish to use a standard repair labor cost or quantity instead of using the actual resource transactions and their costs. Using REST API, you can define the following:

  • Labor Rates: Use the Warranty Provider Rates REST API to define the hourly rate and currency for a resource by warranty provider. This value will be used by the claims and entitlements process for each resource entitlement instead of the standard resource cost and currency. The entitlement must have a warranty contract identified in order to match a labor rate by warranty provider. If a contract is not found, the standard resource cost rate will be used.
    • Note:
      The Start Date of a Warranty Contract will be used to find the corresponding Labor Rate during Warranty Claim and Entitlement validation. Therefore, you will need to define past dated Labor Rates if you have Contracts that have past dated start dates.
  • Standard Repair Times: Use the Warranty Standard Repair Times REST API to define the repair time for a standard operation for a warranty provider. This value will be used by the claims and entitlements process to create a unique entitlement by operation sequence, representing the labor quantity for the provider. If created, this entitlement will be included in the claim; however, entitlements for resources will be created but not included in a claim. The entitlement must have a warranty contract identified in order to find a matching standard repair time by warranty provider. If not found, then the unique entitlement will not be created and individual resource entitlements will be created for resource transactions.
    • Note:
      The Start Date of a Warranty Contract will be used to find the corresponding Standard Operation Repair Times during Warranty Claim and Entitlement validation. Therefore, you will need to define past dated Repair Times if you have Contracts that have past dated start dates.

Warranty Claims Scheduled Process

It is recommended to run this process frequently after operation and work order completion. The process will review warranty-entitled work orders, creating claim entitlement records for each material, resource, and equipment transaction. If these expenses are covered by a warranty contract, then they will be grouped in one or more warranty claims by a matching provider.

The process will also take into consideration if repair coding is defined in warranty coverages or not by referencing the Match Transaction Codes checkbox at the work order header. If this checkbox option set to yes on the work order header, the process will only create warranty entitlements and claims for those expenses where the repair code matches a warranty contract. Else, the entitlements are created, but indicated as not warranty in the claim.