We simply explain the difference between the two and why it pays to have both
If you are looking to buy a new (or second hand) car, there are a few certain things in place that help protect your car against certain risks – car insurance and a motor warranty. Car insurance is something that is offered by insurance companies, and a motor warranty is offered by your vehicle manufacturer.
But! Insurance companies also sell some forms of motor warranties. Because of this, it is pretty easy to get confused between the two! Even though each of these products offer some sort of protection to your car and often overlap with one another in some cases, the truth is – they are 2 VERY different things!
How a car insurance policy works
A car insurance policy is something you take out with an insurance company and will pay a monthly premium for to the insurer. When you have car insurance, your insurer agrees to help cover the costs of damage from a car accident according to what kind of cover you have.
Most car insurers offer 3 different cover options – third party fire and theft cover; third party only and comprehensive cover (this is the most expensive). Each one of these cover options comes at a set price that you pay each month. When you pick one that suits you and your budget, you pay according to this every month.
Third party fire and theft cover
This includes theft, third party liability, and damage that results from hijacking or a fire.
Third party only cover
The third party is anyone who isn’t you (the person insured) or us (your insurer), who is affected by the car accident that involves your car. This type of insurance will cover damage done to the other person’s car or property.
Comprehensive cover
This offers the best level of cover and protection and covers for the majority of car risks and damage.
With Oneplan Car Insurance, we offer comprehensive cover, no matter what kind of cover you choose. And the best part? We make it affordable.
You get to choose how much cover you want for your car, according to the price you can afford every month. If you want 50% cover, then no problem! 95%? Perfect! We tailor your policy to suit you! Simply snap photos of your car to our Oneplan App, follow the instructions and you are covered!
How a motor warranty works
A motor warranty is basically like a promise to you from your car manufacturer (or insurer) in writing. This promise states that your car parts will last for a certain amount of time before giving any issues.
If some part of your car malfunctions and it’s not your fault (you didn’t cause the damage from not looking after your car), then your motor warranty should cover the repairs or replacement costs of this. Most new cars have a warranty that will expire after a certain amount of time or when you have driven over a certain number of kilometres.
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Some common parts that will fall under your warranty include the engine, fuel system, electronic components, the gearbox, sensors, and audio system.
A motor warranty will not cover any general wear and tear that results from you not looking after your car. There are two different kinds of warranties (apart from the basic one offered by your manufacturer):
A pre-owned warranty
This is basically a plan that is suitable for cars whose warranty from their manufacturer has expired. An insurance company offers this kind of warranty, and it will cover the repair and replacement of parts that are listed under your policy details.
An extended warranty
This kind of warranty is an added on extra to your standard warranty on your new car, or if your manufacturer warranty has expired, then you can also get an Extended Warranty to help in protecting your car against any costs of mechanical breakdowns. This kind of warranty will extend on the mileage and years that were stated by your manufacturer in your original warranty.
The differences between the two
A motor warranty will give you peace of mind when it comes to ensuring your car stays in good condition. If there are any factory issues that may lead to an engine or mechanical issue, then your manufacturer or insurer will help cover the costs of repairs and/or replacements.
If you damage someone else’s car, then car insurance will help cover the costs of repairs and damage to that person’s car and property. If your car is damaged from an accident, a natural disaster such as fire or is stolen (theft), then your car insurer will help cover expenses of repairs and/or replacements.
Do I need both a warranty and insurance?
Let’s give you an example of how having both a warranty and insurance can help:
Say you are driving to the shops and your brakes fail. This ends in your crashing into another car. If you have a motor warranty, then this will help cover the costs of new brake pads. If you have insurance, then this will cover the costs of the damage from the accident to the other person’s car and yours (if you have comprehensive cover).
So, having both can certainly help in covering the costs of damage to your car and mechanical issues. Like we said, if you are looking for affordable car insurance that lets you have total control over how much you are covered for, then Oneplan is your answer.
Your Insurance Family,
Oneplan
