How Does a Motor Warranty Differ from Car Insurance?

Specific consumer protection laws are attached to the sale of many electronic goods, appliances, and vehicles. If you are out to purchase a car, you can expect that the vehicle will be covered against particular risks through car insurance and a motor warranty. While car insurance companies offer vehicle insurance policies, motor warranties are provided by vehicle manufacturers.

However, a significant number of car insurance companies do sell various motor warranties, including extended warranty insurance policies. Some people assume that car insurance and a motor warranty are the same. But, even when both are meant to protect car owners, they are applied in different circumstances.

If you are looking for the basic difference between vehicle insurance and motor warranty, then you are on the right page. Read on to know how they differ in letter and spirit.

Car insurance

Vehicle insurance is a policy you can purchase while you become a car owner. Such a policy covers a vehicle for loss/damage, third-party vehicles or property damage, legal liabilities (up to a specific limit), and more during a car collision or other covered events, depending on the level of coverage chosen.

The most common car insurance policies are third-party property damage, third-party fire and theft, and comprehensive. Consider your vehicle usage, the benefits of various policies, and your ability to afford a policy before signing up for a car insurance plan.

Plus, you must read the product’s policy disclosures carefully to know the benefits your vehicle is exactly covered for, the procedure to be followed in the event of a claim, and payment modes, terms, and conditions.

Motor warranty

The vehicle manufacturer or car insurance company from whom you have purchased a motor warranty will indemnify you during the active policy period against the repair or replacement costs of the insured equipment due to mechanical or electrical failures stemming from manufacturing flaws.

It is given that; most new vehicles have a warranty period that can expire after a specific date or when set mileage is reached. Engine, electric components, gearbox, braking system, and sensors are some typical vehicle parts that come under a motor warranty. At the same time, this type of warranty doesn’t include vehicle loss/damage due to regular wear and tear or lack of maintenance.

Two kinds of motor warranties commonly available are –


You can buy this warranty if your vehicle’s original manufacturer’s warranty has expired and your car’s age and mileage fall within limits laid by an insurer.


You can purchase this additional warranty (apart from the standard warranty) during a new vehicle purchase or when your manufacturer’s warranty has lapsed to guard your car against unforeseen mechanical breakdowns. The extended warranty insurance raises the standard warranty duration and mileage offered by your car manufacturer.


Car insurance potentially helps mitigate the financial stress during untoward road incidents, theft, attempted theft, extreme weather events, and more based on the type of policy purchased.

In contrast, a motor warranty makes a manufacturer liable for vehicle loss/damage due to manufacturing defects. Therefore, a motor warranty allows you to avail of repair/replacement services should car components fail within the warranty period.

So, consider buying comprehensive car insurance and a motor warranty if you want a cover for vehicle loss/damage due to accidents and mechanical failures.

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