The Difference between Short-term Insurance and a Motor Warranty When buying a new car, we are often required to have a vehicle insurance policy in place before the car is even allowed off of the showroom floor. We are also presented with a motor warranty that stipulates various guarantees that are given by the manufacturer. To get the best out of your vehicle and your insurance policy, it is important to understand the difference between the two. Firstly, it is important to understand the concept of ‘insurance’. When we buy a vehicle, we take out a car insurance policy. This policy is put into place to protect your asset and ensure that you maintain your financial status regardless of what happens to your vehicle. Insurance policies can be as unique as the people who take them out – your insurance provider may allow each policy to be tailored to meet a variety of individual needs. An insurance policy is comprised of a policy schedule or ‘Coversheet’ which specifies the terms and conditions on which you and your respected insurance company agreed. These terms and conditions detail the type of insurance that you chose; the limitations of your policy and the type of damage for which you are covered. When you take out vehicle insurance, you are presented with a variety of options, one of which is short-term insurance. What is Short-term Insurance? Insurance can be divided into two categories – short and long term insurance. Short-term insurance can simply be defined as insurance that only covers an item for a short period of time. Most insurance companies will offer a short-term insurance policy that can either be renewed on an annual basis or terminated at will. What is a Motor Warranty? Usually stored in the glove compartment, a motor warranty is presented when you buy a new car. The length and value of the warranty will differ depending on the model and make of the vehicle, and sometimes, even the dealership. A motor warranty is an assurance that is provided usually by the manufacturer of the vehicle. This assurance implies that the vehicle is expected to run properly for a stated period of time. If anything had to happen during the stipulated time period, the manufacturer will replace and repair the effected part of the vehicle. As with car insurance, the warranty contains terms and conditions that protect the manufacturer against any allegations or misdemeanours by the owner of the vehicle. The motor warranty covers various technical and mechanical functions.
Difference between short term insurance and motor warranty
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