incurred by the insured due to accidents. It is mandatory by law for all vehicle owners to have a vehicle insurance. Driving a car without is a punishable offence. The individual is liable to be fined and/or license and registration revoked and/or sentenced to jail. Hence it is very important to get a vehicle both for financial and physical security. There are differences in vehicle and the corresponding terms are explained below.

Premium is the amount you pay to the company for providing the cover. The premium depends upon factors like, model and age of vehicle, your age, gender, usage, policy etc. The vehicle company bears the cost due to the accident like vehicle damage, property damage etc.

Coverage is provided to three parties under vehicle namely the insurer, the vehicle and third party. Third party means a party involved in the accident, for instance if you have an accident with another vehicle, that vehicle and its driver are the third party. There are different types of policies depending upon the type of coverage and are explained in the subsequent paragraphs.

Comprehensive coverage provides coverage for costs due to damage by any process such as vandalism, weather, animals, theft etc.
Usually the vehicle becomes unusable after accident. The company pays the expenses incurred for towing and other roadside assistance under towing coverage.
After an accident you may have to rent a vehicle till the company pays you for the vehicle damage or replaces your vehicle. The rental cost will be borne by the company under rental coverage.

During accident if you damage somebody´s property or his vehicle, the costs incurred such as repair/replacement of third party vehicle, medical costs of third party etc will be borne by the company under liability coverage. If somebody else is driving your car then he is also covered under your insurance. However if you are driving someone else´s car then you will be covered by that vehicle´s and not your vehicle´s insurance. However a non-owners policy provides that flexibility also.

If the third party is at fault in the accident then his has to bear the cost. However if the third party is underinsured and is not in a position to pay the costs, then your own will bear the expenses if you have underinsured coverage.

Article Source: Articles Beyond Better

Keith George always writes about valuable news & reviews.A related resource is Vehicle InsuranceFurther information can be found at Sports & Travel

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