Car Insurance Contract

Car Warranty vs Car Insurance: A Comparative Guide

Having a car opens doors to plenty of opportunities since you’ll have the means to get to different places with ease. So, many people opt to buy their own. But, a dilemma often comes with it: whether you’ll apply for insurance or a warranty that offers extended vehicle service protection.

Both terms have been used so much that people think they’re the same. But, car insurance and warranty have distinct differences. Read on to learn about them.

Car Warranty

New cars come with a basic warranty, just like with many other appliances. It serves as a safety net in case problems show up after you leave the dealership. The company will cover the service and replacement of any specific part when it’s deemed necessary. This will help you save money since you won’t have to pay for it.

How Long Is the Validity?

The terms of a warranty vary from one manufacturer to the next, but the essential components covered remain the same. Although many maintain a standard 2-year validity for the entire unit, specific parts have their own that range from 6 months to 5 years. This may also be determined by the mileage, so it’s crucial to understand the documents. But, if you want to invest longer and add more benefits, you can always get an extended vehicle protection package.

What Are Its Limits?

A warranty won’t cover any damage caused by negligence on the customer’s part. It’s not a license to stop taking care of a vehicle. This also can’t be used if you’ve had a roadside accident or if someone bent a side mirror. Modifying the vehicle won’t necessarily void the agreement, but the company won’t pay for an aftermarket product after it breaks. So, avoid using unreliable components.

There are warranties referred to as “bumper to bumper” policies because they cover everything, from the chassis to the air conditioning system. But, standard ones just focus on the engine and other essential components, like the battery, transmission, and exhaust.

Car Insurance

Car insurance works almost the same as life insurance; it’s a contract between you and a third-party company. You’ll pay a certain amount of money each month in exchange for coverage in case of an incident like a collision. Aside from road accidents, this includes vandalism, thefts, and acts of nature, including earthquakes and floods.

In case of an accident, the hospital bills or even death compensation of the driver will be included. Although no one wants this to happen, having insurance in place can cover all the costs that you’ll otherwise have to pay for.

How Long Is Its Validity?

Unlike a standard car warranty that has a set date, this option will continue as long as you pay your monthly premiums. But, since it’s coming from a third-party company, the terms and conditions may change. So, understand the entire policy first and weigh the benefits before signing a contract.

Both options will provide you with a certain comfort that you won’t have to spend cash when an issue comes up. The main difference between them is an insurance policy has a wider coverage that goes beyond the car itself.

This is just a quick rundown of the main differences between a car warranty and insurance. Call Freedom Warranty LLC to learn more about both of them and the extended vehicle protection services they offer.