Car Insurance Vs. Extended Vehicle Warranty: The Difference

When it comes to cars, many people never understand the difference between car insurance and vehicle warranty. Actually, many individuals view warranty and insurance as one and the same thing.

Understanding the difference between car insurance and the extended vehicle is so important as far as making the right coverage and protection is concerned. If you don’t clearly get the difference between the two, you might end up in trouble later when you require a particular coverage you thought had only to find you did have it.

Extended vehicle warranty and car insurance have their similarities, but it is worth noting that they are not the same. One of the similarities is that both are used in paying for your repairs when in certain situations.

In most cases, insurance is mandatory,while the Carchex Car Warranty Review is voluntary. The other difference is that most insurance plans cover your vehicle in case of damages from theft, fire, accident, etc. On the other hand,an extended car warranty will cover your vehicle in case of mechanical or equipment breakdown.

What Does Car Insurance Include?

To be able to understand the difference between car insurance and extended car warranty, let’s look at what car insurance entails.

Liability Coverage

Liability coverage will assist in paying for medical bills or even damage to somebody else when an accident occurs because of your fault.

Under insured Or Uninsured Motorist Coverage

This kind of coverage will take care of any medical bills/repairs in case you get into an accident involving a motorist who is under insured or uninsured.

Medical Payments Coverage

This kind of coverage takes care of any medical bills in case you or your passenger gets injured during a car accident.

Personal Injury Protection

This kind of cover is also referred to as no-fault insurance. It takes care ofsome of the medical bills in case of injuries resulting from a car accident.

What Does An Extended Vehicle Warranty Cover?

Let’s now dive into the extended vehicle warranty and see what some plans cover. You can either get the extended warranty from a manufacturer or an independent/authorized dealership.

Some of the plans that are included in the extended vehicle warranty include:

• Mechanical breakdown insurance
• Vehicle protection plans
• Extended service contracts

Usually, any plan that is sold by an independent provider will either be one of those mentioned above, or any other plans that dealerships offer.

Whether you have chosen a vehicle protection plan or an extended car warranty, both plans assist in paying part of some given problems and repair once the original warranty of the manufacture has expired. Most vehicle protection plans will include some additional features such as rental car reimbursement, roadside assistance, and much more.