Key Differences between Car Warranty & Car Insurance

How crucial is car insurance? Doesn't matter if your car is new or old, ensure your vehicle with a comprehensive insurance plan to cushion yourself against accidental damages and car warranties in case of faulty motor parts. When it comes to financial security, both offer comfort. But, there are lots of differences between them. Yet they carry their benefits. Before getting deeper, let's learn what are they and how are they different from each other, and what game they play in the life of your car?


Making it simple, get to know the vital arguments required to know about your car health, and establish in future to get rid of bad vibrations that hold on with you. Let's carry on!


What is Car Warranty?

  • A car warranty is an assurance by the vehicle manufacturer promising to replace or repair your vehicle if necessary. 
  • It's a promise by the manufacturer and is mainly used as a shield against sudden or unforeseen financial loss caused by a defect in the car.
  • When the manufacturer issues a warranty, the manufacturer guarantees that the vehicle will be free from defects during a specific period.
  • The terms and conditions of the warranty do not apply to any kind of failure due to regular wear and tear of parts of the vehicle. 
  • Apparently, anytime your vehicle breaks down or malfunctions on its own without your fault or by others, then a car warranty will cover you and your car.
  • Car warranties actually cover the mechanical and electrical parts of your car. 

What is Car Insurance?

  • Car insurance is an agreement between you and an insurance company, where you pay a premium in exchange for financial protection against damages to your car and third-party liabilities.
  • When the Third-party Insurance Plan is mandatory, the Own Damage (OD) insurance is a choice. Both the plans are bundled and offered as Comprehensive Car Insurance Policy.
  • One can renew or buy or submit claims according to Car Insurance Plan through the online platform.
  • The operational costs are lower and can devise low-cost insurance plans along with a hassle-free experience.
  • While car insurance provides coverage against accidental damages or losses, car warranties provide coverage against faulty parts.

Types of Car Warranty

New Warranty

  • One can buy a warranty on the purchase of your new car. Most of the companies provide a warranty for 3 to 5 years or based on the kilometers.

Extended warranty

  • Once the new warranty expires, one will have the option to buy an extended warranty. Coverage plans under the extended warranty may not be the same as new warranties.

Advantages & Disadvantages of Car Warranty:


  • You don't have to worry about fault parts
  • An extended warranty is optional
  • It's not mandatory
  • New warranties are of low costs


  • It does not cover all types of repairs such as tyres, brake pads, and windshield wipers.
  • It does not cover accidental damages to the vehicle
  • Cannot include add-ons
  • Cannot include Personal Accident (PA) cover
  • It does not cover third-party liabilities

Is a car warranty the same as insurance?

  • While both provide financial protection against unforeseen liabilities and may overlap at times, they are very different from each other.
  • Car insurance provides coverage against damages due to an accident, man-made or natural calamities, fire/explosion, or losses due to vehicle theft or total loss. As for car warranties, it provides coverage against faulty parts of the vehicle.


Car warranty & car insurance is most important for financial backups. When car insurance provides financial protection in case of accidental damages, the car warranty provides financial protection in case of faulty parts. Kuwy ensures your car warranty for both used and new cars. Approach Kuwy to know and learn about used and new cars better.


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Happy Learning!!


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