What Is Vehicle Insurance

What Is Vehicle Insurance



What is​ Vehicle Insurance?
Due to​ the​ large number of​ vehicles plying on​ the​ roads,​ traffic accidents have become a​ common phenomenon these days .​
According to​ statistics a​ traffic accident occurs every 3 seconds in​ the​ United States .​
Other than following traffic rules,​ one can do not much about the​ traffic accidents .​
However one can reduce the​ financial risk associated with a​ traffic accident by obtaining a​ vehicle insurance.
Vehicle insurance provides insurance cover for costs 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 insurance 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 insurance both for financial and physical security .​
There are differences in​ vehicle insurance and the​ corresponding terms are explained below.
Premium is​ the​ amount you​ pay to​ the​ insurance company for providing the​ insurance cover .​
The premium depends upon factors like,​ model and age of​ vehicle,​ your age,​ gender,​ usage,​ policy etc .​
The vehicle insurance company bears the​ cost due to​ the​ accident like vehicle damage,​ property damage etc.
Coverage is​ provided to​ three parties under vehicle insurance 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 insurance company pays the​ expenses incurred for towing and other roadside assistance under towing insurance coverage.
After an​ accident you​ may have to​ rent a​ vehicle till the​ insurance company pays you​ for the​ vehicle damage or​ replaces your vehicle .​
The rental cost will be borne by the​ insurance 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​ insurance company under liability insurance 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 insurance and not your vehicle´s insurance .​
However a​ non-owners insurance policy provides that flexibility also.
If the​ third party is​ at​ fault in​ the​ accident then his insurance has to​ bear the​ cost .​
However if​ the​ third party is​ under insured and is​ not in​ a​ position to​ pay the​ costs,​ then your own insurance will bear the​ expenses if​ you​ have under insured coverage.




You Might Also Like:




No comments:

Powered by Blogger.