Auto Warranty or Auto Insurance? Do You Know What is Covered Under Each?
Many people are confused by what is covered under their cars auto warranty as opposed to their car’s auto insurance policy. This confusion is borne out of the closeness in scope – both offer protection against problems when they occur. The real qualitative differences though make all the difference when you come to claim, and so understanding them is very important. Follow below as we do a few simple question and answer scenarios. After reading you’ll be able to spot the differences from a mile away.
Question: After a long drive one night, you find the other morning that there’s an awful sounding noise emanating from the transmission area. You take it to your mechanic and he confirms that you have technical problem with the transmission. Do you call up your insurance company or your warranty company?
The Answer: Problems like these are almost always covered under warranty. This is because transmission failures are usually a result of some part failure and these are the sort of things that a manufacturer’s warranty or an extended warranty covers without question. A simple approach to your warranty company or the dealer that sold the car will result in either the transmission being repaired or replaced.
Question: You are making your way up a hill littered with heavy rocks and you go over one. The impact is so severe that it damages your transmission and renders the vehicle immobile. You get towed back to safety and it’s now time to carry out replacement. Should you call your warranty company or insurance agent?
The Answer: Strictly an ‘insurance agent call’. This is so because the damage to the transmission was due to some external factor, not an internal failure of the part itself. Insurance coverage takes into account risk and protects you against that risk. One of the risks of operating a vehicle is that you’ll run over things like huge rocks that damage your vehicle. In essence, the scenario here is one that can be considered an accident. Of course insurance companies will run their own tests and make judgment to see if you are negligent, but that is outside the scope of deciding who to call.
Question: You are driving happily along when the vehicle in front of you stops suddenly. You go for your brakes (naturally), but nothing happens. You do the next best thing and make a slight swerve to lessen the impact but unfortunately you hit the vehicle anyway. Your bumper is completely damaged and further checks reveal that you suffered a brake failure. Difficult one this, who do you call?
The Answer: this scenario has two components. First, there is the collision which would need to be paid for and this would be done under an insurance claim. The fact that you suffered brake failure would not negate the need for the insurance company to get involved because a third-party was involved. Finally, the fact that your brake failed would point to some inherent structural problem – something a manufacturer would need to look at and then pick up the tab for. In this instance, you can see clearly, the importance of having coverage under both things. Brake failure thankfully doesn’t happen to people in the US very often since cars are fundamentally sound, but when they do happen, you need to be covered adequately.
If you have a vehicle on the roads, your state laws may already require you to have auto insurance, but may not necessarily have auto warranty coverage. If you don’t you should get one – this can be done via a reputable online auto warranty company. Many can be found online and are easily verified for reliability by checking their Better Business Bureau credentials.
If you find yourself unable to decide on the nest choice, there are lots of extended auto warranty review websites on the web that will guide you through the process of selecting a company. These websites usually offer recommendations free of charge so you need not worry about being out of pocket before you actually come to purchase coverage. Best of all, many can give you the insights you need in selecting the right coverage; there’s nothing worse than selecting poor auto warranty coverage.
Hopefully the question and answer scenario was useful in helping you understand the qualitative differences between auto warranties and insurance coverage. Remember, although they may cover different things, they operate together for maximum protection.