Auto Warranty, Car Warranty Insurance or, Car Repair insurance functions as a prepaid service contract. When a consumer pays for Auto Warranty insurance, they are paying money up front in exchange for the company’s agreement that it will compensate you for the costs of certain repairs associated with the car. The agreed upon compensation will vary depending on the agreed upon conditions and exclusions made between the company and the consumer. This service may also be referred to as an extended warranty or a vehicle service agreement.
It should be noted however, that the companies offering these services do not use these terms interchangeably. Each company markets themselves differently depending on the services they provide. In addition, insurance companies are not the same as extended warranty providers. The bottom line is auto warranty insurance and car warranty insurance are simply other terms used for extended warranty, aftermath warranty, and extended service contracts.
What these warranties cover varies but a basic warranty will usually cover nearly everything in the car. This will include the audio systems, air conditioning and, electrical components. This basic type of warranty usually last for three to four years depending on the company. For defects in catalytic converters and other components of the emissions control companies are required by law to provide an 8 year or 80,000 mile warranty.