What is the Difference between Indemnity Insurance Warranty and Guarantee
When we buy anything like some property, vehicle or any electronic device, the chances of damage or malfunctioning remain there. To avoid these uncertainties about sudden and unintentional loss, the manufacturers and sellers take care of consumer rights in terms of compensation of their loss. Indemnity, Insurance, Warranty and Guarantee are the names of some common terms in our society and all these are related to financial compensation of consumer in case of any accidental loss. Here is the difference between Indemnity, Insurance, Warranty and Guarantee.
Indemnity
The term Indemnity is used as a type of insurance that is typically adopted by business personnel to get compensation for potential loss against the premium deposited by insured. The compensation from Indemnity may be in the form of cash payment, replacement or repair.
Insurance
The term insurance simply refers to contract between insurer and insured against which the insured person or company gets the financial compensation according to agreement for the damage or loss against its deposited premier to insurer.
Warranty
Warranty is very close term to insurance as it care for customer’s rights against any damage or loss of purchased product but in return of certain amount submitted by buyer against a legal contract. In most cases, warranty claims are used for reparing of purchased items within contract period from warrantor.
Guarantee
Guarantee is the true protection of customer’s rights against any damage or loss and provides compensation in the form of replacement of purchased item just free of cost from manufacturers. Mostly the time period of guarantee is provided by manufacturer and there is no written agreement between seller and buyer.
Indemnity vs Insurance vs Warranty vs Guarantee
Indemnity is the contractual agreement between buyer and seller for compensation from seller side in case of any damage or loss of buyer and usually in insurance form. It is different from other forms of insurance in terms of providing proof of loss amount that is not necessary to provide in other form of insurance. On the other hand, warrantee is similar to insurance as to claim warrantee it is necessary to deposit some amount at the time of buying products unlike guarantee that require no amount deposition for acclaiming guarantee. Moreover, guarantee is provided by manufacturers and warrantee is provided b sellers.
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