Not all warranties are insured but what does this mean in a day-to-day sense? Insurance is something we all have to live with and worry about and, generally speaking, the more informed we are about it the better. With that in mind, we thought we’d put warranties under the microscope and explore the difference between insured and uninsured warranty, specifically when it comes to insuring our vehicles.
What is an insured warranty?
Generally speaking, if your warranty is insured it means it has been agreed in conjunction with an underwriter by a legitimate insurance company. This gives the buyer coverage in case something should happen to the vehicle.
What is a non-insured warranty?
Otherwise known as a discretionary warranty, with this plan you are essentially taking the seller at their word. This means you’re going to be relying solely on the seller to resolve any problems you might have. It might sound like this is a bad idea but in some situations, there can actually be benefits.
Exploring the pros and cons
With an insured warranty you’ll be paying an added premium for the underwriting costs. These underwriters will also need to sign off on any repairs that need to be made and that can take time. With a discretionary warranty, meanwhile, there are no third-parties to worry about. It’s just you and the dealer or their preferred partner. The reality, however, is that there are complex pros and cons to each.
Accidents – An insured warranty is likely to include accident protection, which is important if your car does damage to somebody else or their property. This is something a discretionary warranty simply cannot cover, though it will cover you if your car breaks down or components begin to fail.
Theft – In the case of car theft, it’s wise to go with an insured warranty. The underwriters are more likely to be able to help you out here and under a non-insured warranty plan, if the theft happens as a direct result of your actions (it can and does happen) then you might not be covered at all.
Black or white or shades of grey?
Ultimately, an insured warranty operates in very black or white terms and there is very little wiggle room or grey area to negotiate. Insured warranty, however, is also the only way you’re going to be able to claim compensation through the FSCS, file a complaint with the Financial Ombudsman Ser-vice or the FCA. It all depends on the situation. More often than not, however, we would always recommend going with an insured warranty if you can afford it. As, particularly in this day and age, it always pays to have a safety net.