Whether you own a vehicle, home, or both, it's important to understand what insurance and a warranty does and does not cover. Auto and home insurance is an arrangement with a company that provides a guarantee of compensation for specified losses and damages in return for a payment in premium. A warranty on the other hand is a guarantee to provide repair or replacement if necessary within a specified time. Purchasing both provides the best available coverage.

In other words, insurance covers the vehicle or home itself while a warranty covers what makes a vehicle or home comfortable to operate or live in. For example, if you're in an automobile accident and your car is damaged, insurance will cover the damages because it was an accident. However, if you're air conditioning or transmission starts to malfunction or stop altogether from normal wear and tear, a vehicle warranty would possibly cover most if not all of the repairs, and replacement if necessary.

I have an example from my own just a few months ago. My water heater (which last 18 years!) finally stopped working earlier this year. Fortunately I have a warranty to cover what makes the home comfortable to live in. For example, it covers the water heater, washer and dryer, refrigerator, stove, heat and air conditioning unit, chest freezer, etc. I filed a claim with my home warranty company, and while they didn't pay for the installation costs, they did determine that a replacement was needed and I now have a brand new water heater!

Please note that every circumstance and situation is different. I cannot guarantee what an insurance policy or warranty will or will not cover. It depends on how the damage or loss occurred, what a company will and will not cover, etc. If you have any questions about what your insurance policy covers, please email me at service@reducemyinsurance.net or call 615-900-0288 opt 3. I hope this clears up the difference between insurance and warranties, and if not, please let me know if  you have any questions or experiences of your own in the comments below!

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