What is the difference between an insurance policy and a warranty?

The difference between an insurance policy and a warranty is distinct but related in Florida insurance law. An insurance policy is a legal contract that provides protection from financial losses due to specified risks, such as fire, theft, or an accident. In general, an insurance policy is a promise to pay a certain amount of money if the insured person or property experiences a covered loss. On the other hand, a warranty is a guarantee of quality or performance that a product or service will meet a certain standard. For example, when you buy a new appliance, it may come with a warranty that covers repairs for a certain number of years. The purpose of a warranty is to provide assurance that the product or service purchased will work as stated in its advertising or packaging. In short, an insurance policy compensates you for losses due to covered risks, while a warranty guarantees the quality of a product or service. In Florida insurance law, both are viewed as legally binding contracts, and each can provide important protection from financial loss or liability.

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