Auto Warranty vs Auto Insurance: How Do They Differ?
If your vehicle is covered by a warranty, it could assist you to pay for certain issues, such as mechanical breakdowns. This is not covered by your auto insurance policy. It is important to know that your car insurance and warranty offer very different kinds of protection.
It is essential to understand the distinction between auto insurance and a vehicle warranty, as well as the items that each serves to cover, if you are looking to purchase a new or used vehicle. Auto warranties and car insurance vary in the protection they give. A vehicle warranty covers mechanical failures, parts, and labor. Car insurance may cover car repairs after a natural disaster, theft, accident, or fire.
What Does a Car Warranty Cover?
There are two types of warranties: a new-car warranty from the manufacturer and a used-car or extended warranty from the manufacturer or a third-party provider.
A new automobile warranty refers to the manufacturer’s pledge to pay for replacement components or covered repairs within the warranty term. This warranty is normally included with your vehicle. New car warranties may range from 3 to 10 years or 100,000 miles. Read your warranty documentation carefully to understand what is covered.
New automobile warranties include two sections:
- Bumper to Bumper Coverage: This usually includes electronics and A/C. Unfortunately, it will not cover wear and tear items like brake pads or tyres.
- Powertrain Coverage: Covers the engine and gearbox.
You may buy an extended warranty to protect your new or used vehicle for a longer period. Manufacturers or third parties may issue these guarantees. However, extended warranties usually do not cover wiper blades, brake pads, or tyres. Your warranty may demand a deductible before covering repairs. Warranties also do not cover oil changes and fluid top-offs. No warranty excuses you from maintaining your car. You should repair your vehicle at all specified intervals and keep records of any maintenance.
What Does Car Insurance Cover?
Auto insurance may pay for damage caused by an accident, fire, or theft, but it rarely pays for problems with the car’s engine or equipment. Car insurance may cover more than just vehicle damage.
The following types of coverage are generally included in auto insurance:
- Liability Coverage: Pays for someone else’s medical costs or property damage from an accident you cause.
- Collision Coverage: Pays for damages if your automobile collides with another vehicle or object.
- Comprehensive Coverage: May help repair or replace your vehicle if destroyed by fire, theft, vandalism, striking a deer, or falling debris.
- Uninsured/Underinsured Driver Coverage: Helps pay expenses if you are struck by a driver with insufficient or no insurance.
- Medical Costs Coverage: Provides compensation for vehicle accident injuries.
- Personal Injury Protection: May compensate for vehicle accident injuries.