• 15
  • November
    2011

Florida is no stranger to natural disasters. When such "Acts of God" occur, many look to insurance policies or warranties to replace or repair damaged property such as automobiles. Not everyone is aware of what insurance covers and in what situations a warranty applies, or that sometimes the coverage overlaps.

Warranty

Very simply stated, a warranty covers motor vehicle defects. If a consumer discovers a defect on a car that he or she purchased and the car is under a warranty, the manufacturer will repair or replace the defective part.

Things begin to get complicated when car manufacturers and sellers offer "extended warranties" that cover damage that is not related to a defect in the product, but rather results from accidents. Car sellers often bundle such extended warranties with vehicle service contracts. Even extended warranties exclude damage from natural disasters, however.

Insurance

Insurance generally covers repairs to a car when a vehicle is damaged. In the U.S., insurers generally offer three types of insurance:

•· Liability: covers damage that the insured driver causes to other property

•· Collision: covers damage to the insured driver's vehicle in an accident, no matter who is at fault

•· Comprehensive: covers damage from fire, weather, theft, vandalism and other such incidents.

In the event of a natural disaster, people would make claims under a comprehensive insurance policy. The repairs on the car and any new parts would then have their own warranties, which the car owner could use if the part or repair should fail in the future.

People need to read their insurance policies carefully, however, as some insurers specifically exclude coverage for certain events, such as flood damage, from policies. An insurance policy also differs from a warranty in the amount that the insurer will reimburse the policy owner. While a warranty replaces the defective part with an entirely new one, an insurance policy only pays out the fair market value of the vehicle; the insurer will not provide the insured with a new car.

When disaster strikes, it is not the time to try to learn what a warranty covers and what insurance covers. It is wise for consumers to know the extent of coverage before their cars sustain damage, in the event that the insurance company or manufacturer tries to fight the consumer. If you are having difficulties with an insurance company, contact an experienced attorney who can help advocate for your rights.