Understanding the Difference Between Car Insurance and a Car Warranty
Both car warranty and car insurance cover repair costs of your car but their usage are vastly different. While car insurance covers a broader range of factors that lead to repair expenses, a car warranty is limited to covering expenses related to the breakdown in mechanical parts of the car due to malfunction.
What is a Car Warranty?
A car warranty is a contract or a guarantee offered by the car manufacturer to replace or repair a part, that is mentioned in the contract, that malfunctions or fails prematurely due to a manufacturing defect, without extra charges. A new car always comes with a car warranty. If you buy a used car, you can buy an extended car warranty from independent extended-warranty providers.
However, a car warranty applies for a specific period or mileage after you purchase the car. It expires even if it meets one of the conditions. For example, the car warranty is for 3 years or 30,000 miles. If your car covers 30,000 miles within 2 years or in 3 years has completed only 10,000 miles mileage, the warranty term will expire.
What is Car Insurance?
Car insurance is designed to protect your finances if your vehicle is damaged in a collision or another covered peril, such as theft, fire, or a natural disaster. It also provides:
- Liability coverage – May help to pay for someone else’s medical bills or damage to their property by an accident at which you were at fault.
- Collision coverage – Repairs or replaces your car if it’s damaged in a crash with another vehicle or object, regardless of fault.
- Comprehensive coverage – Repairs for damage to your vehicle caused by things other than a collision, such as fire, theft, vandalism, or falling objects.
- Medical payments coverage – Covers medical expenses for you and your passengers in the event of an accident.
- Uninsured motorist coverage – If a driver hits you with no or too little insurance, this coverage aids your car repair expenses.
What’s The Difference Between Car Warranty & Car Insurance Coverage?
When you purchase a new car and after some time observe that some part is not functioning to its optimum level, you must take it to the car dealership. If the car part is included in the warranty and the malfunctioning is due to a manufacturing defect, the part will be replaced without you having to pay for the replacement expense.
A car warranty may cover damages due to:
- Mechanical defects
- Extreme weather conditions
- Normal wear and tear
- Maintenance issues
However, there are certain instances when the damage to the car parts may be excluded from your car warranty. Routine maintenance services such as oil changes, tire rotation, fluid top-offs, and change of brake pads are not included in the warranty. Also, if the car part is damaged due to vandalism, collision, or natural disaster, it will not be covered by your car warranty. Instead, the expenses incurred in the repair or replacement of the damaged parts will be taken care of by your car insurance.
The types of coverages that you may include in your car insurance are:
- Liability coverage – It covers third-party bodily injury or property damage expenses when you are at fault.
- Collision coverage – The repair expenses for damages caused to your car due to a collision are covered in this coverage.
- Comprehensive coverage – When your car is damaged by a covered peril, it covers the repair or replacement expenses.
- Medical payments coverage – This coverage pays for the medical expenses if you or your co-passengers are injured in an accident.
- Uninsured or underinsured motorist coverage – If the person who has caused the accident is uninsured or underinsured, your expenses are covered in this coverage.
Types of Car Warranties
New Car Warranty
A new car warranty also referred to as a manufacturer’s warranty is the warranty that you get on buying a new car. It is provided by the car manufacturer and covers specific car parts repair and replacement expenses caused due to mechanical failure.
The warranty is available for a limited period. The factors that determine the warranty period and conditions may vary from one car manufacturer to another. The warranty expires with whichever condition occurs first. They are, a specific time period after the car purchase or a specific mileage that the car covers.
The new car warranty is of two types:
- Bumper-to-bumper coverage
This coverage includes car parts such as the car’s electronic or air conditioning system or any part that does not experience wear and tear due to regular use of the car. It usually does not cover car parts such as tires, wiper blades, and brake pads.
- Power train coverage
The power train coverage includes the car’s engine and transmission components.
This type of car warranty is mostly for used cars that are outside the car manufacturer’s warranty period. Also, once the new car warranty period expires, the car owner may opt for an extended warranty. The coverage conditions, as with the new car warranty, vary from one extended-warranty provider to another. However, most extended warranty coverage period is determined by the number of years or mileage, whichever condition is met first.
Roadside Assistance Vs Car Warranty
While some car warranty providers may provide roadside assistance as part of their coverage, most car insurance providers offer roadside assistance as optional coverage. You must compare the coverage costs and services provided by both providers before buying the roadside assistance service.
Keep in mind that even the most protective policy isn’t a license to stop taking care on the roads. For quality auto insurance, contact the team at Chambers & Company Insurance Brokers who can tailor a policy for your needs.