Read the extended warranty contract! It's shocking how much is not covered. Who decides if it 's covered? The short answer here is that the company decides. But what happens if you don't agree? For example, a coolant hose blows out on the highway and it isn't safe for you to stop. You continue to drive to the next exit where you can safely stop.
Because you didn't stop right away, the engine has been damaged. This type failure would normally be covered, but because you didn't stop right away, the company declines the claim. Now what? You need to know all this before you buy the plan. Brakes, plug wires, plugs are all considered maintenance.
Does the plan cover towing? Can you tow to the mechanic of your choice or only the closest to your breakdown location? Be careful: In some states these extended warranty plans aren't considered insurance policies and, as such, aren't subject to the insurance regulations that a life or health insurance company must obey. In those states where the "plan" is not insurance, extended warranties fall under the same regulations that cover other warranties.
The salespeople might try to pressure you into buying this warranty at the point of purchase. They might even tell you that you must decide today. Not only do you not have to purchase the warranty at the point of sale, you might want to wait until the vehicle's factory warranty is close to ending to avoid the factory and extended warranty overlapping.