Understanding Insurance Terminology

Understanding Insurance Terminology

The Difference Between Car Insurance, A Warranty, And Mechanical Breakdown Coverage

by Vilma Maki

Understanding car insurance is a necessity if you own a car, and many people find that they are somewhat confused when it comes to knowing the differences between car insurance, a car warranty, and mechanical breakdown coverage. Are you confused about this? If so, here is an explanation of each of these things and how they are different from each other and the same.

Car insurance

Car insurance is primarily designed to cover damages to your car or to other cars from accidents or acts of nature that may lead to damage. Your car insurance can protect you against damages you cause to other cars if you are responsible for colliding, or it can cover your own car. It may also offer other coverages, too, such as windshield cracks, damage from vandalism, or rental care coverage if your car is in the shop after a collision. Car insurance is required in most areas, primarily to protect other drivers.

A vehicle warranty

A warranty on a car is not the same as insurance. A warranty is something the dealer or manufacturer of the car provides to you for free or for a price. If something breaks on your car that is covered by the warranty, you can have the repairs completed for free. Most new cars come with warranties, but the warranties only last for a certain length of time. You can purchase a warranty on almost any car, but it will likely only cover certain types of issues you might have with your vehicle.

Mechanical breakdown coverage

Mechanical breakdown insurance falls in the middle of these two things. It is a form of insurance, but it is not something you use for damages caused by accidents. When you buy this coverage, your car is protected against major problems it may experience. If your car experiences transmission problems, for example, you could file a claim on this insurance, and your insurance company would pay for some or all of the repair expenses.

Mechanical breakdown coverage is similar to insurance, as it provides coverage for car problems, but it is similar to a warranty because it is used for repairs that are not related to collisions or accidents of any kind.

Understanding the differences with these things can help you have the right coverage for your vehicle. To learn more about protecting your car, contact an insurance company in your area, such as Bear River Insurance.


About Me

Understanding Insurance Terminology

After we purchased our first home, we realized that it might be a good idea to evaluate our insurance coverage. Although we had purchased homeowners insurance before, we had never owned a policy as large as the one we would need for our new place. Also, our new home had a trampoline and a swimming pool, which made us worried about liability. To iron out the details, I decided to meet with our insurance agent. We talked about things like monthly premiums, coverage limits, and deductibles, and it was incredible to learn more about the terminology. This blog is designed to help you with the same types of questions.