Delaware Business Insurance Update from CNC Insurance Associates Inc. "Warranties and Insurance Are Not The Same Thing" 10-6-14

So you go to the appliance store and you buy a brand new stove. The dealer begins putting the info into the computer and then asks you if you want to buy a 2 year warranty. You are told that it covers if "anything goes wrong", and will cost just a small amount of money each month or a one time fee.  Now you may ask "isn't this insurance? Warranties  have terrms and conditions in their contracts just like insurance policies. The money you pay is just like an insurance premium. When there is a problem you call the warranty company and put in a claim just like insurance. So what is the difference between warranties and insurance? The most glaring difference is that warranty contracts are not regulated as strongly as insurance is. Most people that sell warranties are not licensed. Insurance professionals are required to be licensed. Warranty contracts can vary completely from one to another, where insurance contracts have some consistency in coverages and language.  There are also many differences in the concept of what is covered between a warranty contract and an insurance contract. Warranties tend to cover inherent wear and tear or manufacturers defects. Insurance usually covers perils like wind, theft, fire, etc....
Though they seem to be the same, the difference between warranty contracts and insurance contracts are many. Just make sure when you buy both you know those differences before you spend your money ! Until next time be careful out there and know your risks.
By G. Kevin Nemith Pres. CNC Insurance Associates Inc. & The Small Business Insurance Center
Serving DE, MD, PA, VA, & NJ
www.cncinsurance.com
www.bizinsurancetv.org

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