Warranty and Insurance
When you buy something, you want to know that it will last and that it is protected from damage. Both a warranty and an insurance policy can provide some types of protection, but they do not provide the same benefits. Warranties are common on many products, but you may need to purchase an additional insurance policy to ensure that you've taken care of your property.
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Warranty
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A standard warranty comes with many different products from telephones to video game systems. You can even get a warranty on a new home. The warranty is a guarantee from the manufacturer that the product is in good shape. The warranty guarantees against anything that is wrong with the product as a result of a manufacturer defect. For example, if you take your new MP3 player out of the box and it does not play music, this should be covered under the warranty.
Insurance
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Insurance is a type of product that you can buy on many high-end products. It is essential when you buy a house or a car. Insurance covers any damage to a product that is not caused as a result of something the manufacturer did. For example, if you have a high-end cell phone and you drop it on the ground, your warranty would not cover that. You would need some type of insurance on your phone. The insurance policy will then kick in and help you replace your phone.
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Extended Warranty
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When you buy some products, you might be given the opportunity to purchase an extended warranty. This is readily available with most cars and with some consumer electronics products. An extended warranty is not really a warranty in the traditional sense. Instead, it could be considered a service contract. The extended warranty will cover any repairs or maintenance for the product after the traditional warranty expires. This type of product may not be worth your money because you are essentially just prepaying repair bills.
Protection
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When you buy an expensive product, you need to ensure that you are protected financially. At the same time, you do not want to pay for an unnecessary insurance policy or warranty when it will not provide that much benefit. Before purchasing an insurance policy or an extended warranty, you need to see exactly what is covered. This will help you decide when to go ahead and spend the extra money and when to keep it in your pocket.
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