Warranties are contracts governing repair and/or replacement of an
item in the event of damage resulting from ordinary use or faulty
workmanship. Insurance protects items from hazards, such as theft,
fire or water damage, etc. In most cases, warranties will not provide
coverage in those situations.
A comprehensive guide to the legal aspects of providing warranties can
be found at: "A Businessperson's Guide to Federal Warranty Law"
Federal Trade Commission
Insurance providers are governed by a separate set of regulations.
"Forming an insurance company first requires you to raise a sufficient
amount of capital to reach regulatory requirements. Each state has
its own insurance regulations, and you must meet the regulations of
each state you plan to do business in."
"Here is a listing of minimum insurer capital requirements by state:
"STATUTORY MINIMUM CAPITAL AND SURPLUS REQUIREMENTS" National
Association of Insurance Commissioners (August 31,
"Insurance companies" by Wonko, Google Answers (November 10 and 12,
"Accidents happen. You can't avoid the inevitable. Extended warranties
and care plans offered by computer manufacturers MAY SOMETIMES offer
limited accidental damage coverage, but will not cover against theft."
"Portable Electronics" Safeware (2005)
"10. What is the difference between homeowner's insurance and a homeowner warranty?
Your homeowner?s insurance is hazard insurance, and covers items
damaged in fires, by water, by wind or other covered events. A home
warranty repairs or replaces systems or appliances in your home that
break down from normal wear and tear."
"FAQs" Warrantybynet (2006) http://www.warrantybynet.com/home_war_faq.asp?m=3#10
"There is a difference between the warranty and insurance.
Warranty: Covers the cost of any repair - meaning the hearing aid IS
repairable (example: hearing aid suddenly stopped working)
Insurance: Covers loss, or damage beyond repair (e.g., dog totally
destroyed the entire hearing aid!)
It is confusing because normally new hearing aids include both -
a one year's insurance and one year's warranty (some companies
provide routine two year warranty and insurance coverage).
After one year (or two if that's the case):
If your hearing aid stops working, you will be expected to pay the
cost for a regular repair normally between $125-200.
If you lose your hearing aids, expect to pay the full cost for replacements."
"The Difference Between Insurance and Warranty" Colorado Springs
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