Most people compare service contracts on the repair side: what is covered, how claims are handled, how long the term runs. The harder question comes when the car itself is gone. A crash, a flood, a theft that is never solved, or an insurer's decision that repairs cost more than the car is worth can end the car's life in an afternoon, and the contract has to respond to that.
Find the terms for a loss. Look for a passage that addresses total loss, theft, or destruction. Some agreements treat these events as a form of cancellation. Others say the contract stays with the vehicle, the owner, or both. Read which one applies, and whether the event must be reported within a set period.
Ask who receives any refund. If the contract allows a refund, check whether it goes to you, to the lender or lienholder named on a loan, or to the dealer who sold it. If a lender is involved, that lender may have its own rights to the money. Put the question to the provider in writing and keep the answer.
Ask how any refund is worked out, without fixating on a number. You are not trying to pull a figure from a salesperson. Ask what the formula uses, such as the time left, the miles driven, or the claims paid so far, and whether the provider takes any deduction before it returns anything. A vague answer is a signal to keep reading.
Check how the contract meets insurance. A car insurer's total loss settlement and a service contract refund are separate payments with separate rules. Ask whether the contract requires you to report the loss to the insurer first, and whether the provider expects a copy of the insurer's settlement or the salvage paperwork.
Ask about the salvage title. If the car is declared a total loss and then sold for parts or rebuilt, its title status changes. Ask whether that change affects the contract, whether the provider has any say in a rebuild, and whether a later owner of a rebuilt car can still hold coverage.
Compare sample wording before you buy. The fastest way to see these clauses is to read them in a sample contract before anyone asks for a deposit. Some providers publish sample terms. You can check which companies do on this site's list of vehicle service contract companies that post a sample contract you can read first, then compare that sample against the paper you are shown at the desk.