If a car has a warranty, the warranty will help with repairs that are separate from what a car insurance policy covers. A car warranty and a car insurance policy are two very different types of protection.
A car warranty is offered by the manufacturer and pays for replacement parts or repairs during the warranty period. Most new cars will come with a warranty, which can also be extended after it lapses for additional fees. If the manufacturer does not offer a warranty or if you are buying a used car, there are also third-party warranties available.
Warranties are usually included with the cost of your car. Warranties vary among car manufacturers, but they generally exclude tires, batteries and other wear and tear replacement items. The general rule of thumb is that car warranties cover mechanical issues that stem from manufacturing errors.
Unlike a car warranty, car insurance helps pay for damage to your car as the result of a car accident or other insured events. A insurance company guarantees it will cover financial losses after a policyholder the deductible listed on the car insurance policy. A car insurance policy will not cover problems due to mechanical problems like warranties do.
Car insurance is also mandatory of all cars while car warranties are not. In Illinois, liability insurance is required for all motor vehicles that must display license plates. This includes cars, vans, motorcycles, recreational vehicles, trucks and buses but excludes trailers. What your car insurance covers depends on the coverage you selected. Available coverages include:
- Liability insurance
- Full coverage
- Uninsured and underinsured coverage
- Medical payment coverage
- Towing and rentals
- Roadside assistance
If an incident occurs in an area that you have insurance coverage for, you file a claim with your insurance company and they will pay for the repairs. After a policyholder pays their deductible, the insurance company assumes the rest of the expenses.