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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.
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.

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.

Protection is provided to three parties under auto insurance namely the insurer, the automobile and third celebration. Third celebration means a celebration involved in the incident, for instance if you have any sort of incident with another automobile, that automobile and its driver are the third celebration. There are different types of policies depending upon the type of coverage and are explained in the subsequent paragraphs.

Comprehensive coverage provides coverage for expenditures due to harm by any process such as vandalism, weather, animals, theft etc.

Usually the automobile becomes unusable after incident. The plan provider will pay the costs received for pulling and other roadside assistance under pulling policy.

After any sort of incident you may have to rent a automobile till the insurance provider will pay you for the automobile harm or replaces your automobile. The rental cost will be carried by the insurance provider under rental coverage.

During incident if you harm somebody´s property or his automobile, the expenditures received such as repair/replacement of third celebration automobile, medical expenditures of third celebration etc will be carried by the insurance provider under policy. If somebody else is driving your car then he is also protected under your insurance. However if you are driving someone else´s car then you will be protected by that Vehicle Insurance and not your vehicle´s insurance. However a non-owners policy provides that flexibility also.

If the third celebration is at fault in the incident then his insurance has to bear the cost. However if the third celebration is under protected and is not in a position to pay the expenditures, then your own insurance will bear the costs if you have under protected coverage.