Car Warranty vs Car Insurance - Do you need both?

Having a car is a requirement in the UAE and also having a comprehensive insurance plan is a requirement be it a used car or a new car. A comprehensive insurance plan protects you against accidental damages and car warranties in case of faulty defective motor car parts. Both the car warranty and car insurance provide financial security. Here in this article, we will provide you with the difference between a car warranty and car insurance. 

Car Warranty and its coverage

A car warranty is given by the car manufacturing company as an assurance. It promises to replace or repair the car damages when it is required. A warranty is a manufacturer promise, it is a protective shield that supports during the accidental losses which are caused due to the car accident. 

The car company during its production ensures all parts are effective and the manufacturer issues a warranty. It is a guarantee that a car will be safe and free from any defects during a certain period of time. This time period varies from company to company. If there is any defect during this period the car manufacturer company will do all the repairs or replacement of spare parts will be done without charging any extra expenses. 

If there is any wear and tear damages to the vehicle then the car warranty terms and conditions will not be applicable. If there are any housekeeping charges for repairs and replacement of car spare parts then the company will include it in the warranty period. 

Generally speaking, if there is any breakdown to the vehicle which is done without your fault then a car warranty will provide coverage. 

The car warranty will cover mechanical repairs and the electrical parts repairs related to your vehicle. A car warranty is provided for you and your car safety which includes car equipment like airbags, seat belts and other accessories. A car warranty is also provided for the engine or the gearbox. 

Types of Car Warranty

There are two types of car warranties, one is a new warranty and the other an extended warranty. The new warranty is issued by the car manufacturer during the purchase of the car. Many manufacturers provide a warranty for three to five years or based on the kilometers. 

On the other hand, an extended warranty is an extension of the new warranty. If the new warranty expires you should extend the warranty. The warranty coverage plans may not be the same as the original car warranty. Since the wear and tear of the car increase over a period of time the warranty cover will not be the same as the new warranty. 

If you have car warranty coverage then there are no worries about defective parts. It is optional to have an extended warranty and it is not mandatory as car insurance. New warranties are free of cost provided by the car manufacturer. 

It is to be noted that car warranty coverage does not cover all the repairs such as tyre repairs, brake pads, windshield wipers and others. Accidental damages are not covered under warranty and also there is no option to add personal accidental coverage. Car warranty does not cover third party liability payments. 

Car Insurance

Car Insurance is mandatory across all the emirates in the UAE. Car insurance aims to protect the drivers, travelers, co-drivers and other motorists during the happening of an unforeseen event. The liability coverage is different from company to company and also differs from jurisdiction to jurisdiction. 

For vehicle body coverage there are different policies, medical assistance during the event of an accident, car rental services and other services are also provided. 

The car insurance coverage provided by the companies includes liability coverage, collision coverage, comprehensive coverage, uninsured motorist, medical assistance and gap coverages. 

Car insurance is an agreement between the insurer and the insurance company. The insurer pays the insurance premium to the insurance company for the services of financial protection during an accident. 

Types of Car Insurance

There are two types of car insurance: One is third party insurance and the other is a comprehensive car insurance policy. Third-party insurance is mandatory insurance and it is considered as the basic insurance policy. Whereas comprehensive car insurance is an additional service where more protection is provided to the insurer and their vehicle. 

Renewal of Car Insurance

Car insurance policy has a tenure of usually one year after that the insurer should renew the policy. The renewal of car insurance can be done through online mode or through the insurance agent. For the payments made through the digital mode, the insurance costs are lower. Financial protection is provided through car insurance and it is important to renew car insurance from time to time. If you renew car insurance it will provide you peace of mind. 

Car Warranty vs Car Insurance

Car warranty and Car insurance both are required for your safety. It ensures peace of mind when you are driving as the insurance will take care of accidents and the car warranty will take care of the defective car parts. Both car insurance and car warranty are two different ways to provide financial protection. These are aimed to protect the car and the car drivers life. A car warranty is not mandatory once a new warranty expires but car insurance is mandatory. Once the insurance expires the insurance holder should renew the car insurance. It is a wise decision to have both the car warranty and the car insurance as it provides relief and life protection.