As someone very wet behind the ears when it comes to the world of insurance I have been wondering about the main difference between insurance and warranties. They sort of seem the same but when digging a little deeper they are inherently different products (some of you are problably going...um yea dough head!). For those of you who are unclear on the difference, here is what I believe I have learned:
Insurance does not cover manufacturing defects or natural wear and tear.
Warranty does not cover accidental/malicious damage, loss or theft.
I am sure there are fringe cases to this but this appear to be the norm. To state it in the positive:
Insurance covers accidental/malicious damage, loss or theft.
Warranty covers manufacturing defects and natural wear and tear.
This is all assuming you have read the fine print on both policies [grin].
When it comes to your home insurance and home warranty I found this little diagram helpful:
So what have I learned? That I should have both and that when I have asked others to explain it simply to me their answers did not suffice. So I hope this helps my other friends who are slow on the uptake.