7.1 Part D Coverage for Damage to Your Auto

Part D - Coverage for Damage to Your Auto

The ISO Personal Auto Policy (PAP), most commonly tested in the PP 00 01 (current edition, 2018 form widely in use), organizes coverage into six lettered parts. Parts A through C handle liability, medical payments, and uninsured/underinsured motorists.

Part D - Coverage for Damage to Your Auto is the physical damage (first-party property) section that pays to repair or replace the insured's own vehicle. It is the only physical-damage coverage in the PAP, and exam questions almost always frame it around two coverage triggers: Collision and Other Than Collision (OTC), also called comprehensive.

Collision vs. Other Than Collision

The distinction is foundational and frequently tested. The PAP defines the terms by their cause of loss, not by severity of damage.

• Collision = the upset (rollover) of your covered auto or its impact with another vehicle or object. Hitting a guardrail, another car, a tree, or a pothole, and rollovers, are all Collision losses.
• Other Than Collision (OTC / Comprehensive) = any loss other than Collision. The PAP gives a non-exhaustive list of OTC perils.

Exam trap: a loss can only be one or the other, never both. The classifier exam writers use is, "Did the auto upset or strike something?" If yes, Collision; if no, OTC.

The PAP expressly lists these as Other Than Collision perils:

The deer/animal trap is the single most-tested item: striking an animal is classified as OTC, not Collision, even though it feels like an impact.

Loss settlement, ACV, and deductibles

Part D pays the lesser of (1) the actual cash value (ACV) of the stolen or damaged property, or (2) the amount necessary to repair or replace it with property of like kind and quality. ACV = replacement cost minus depreciation. A subjective adjustment for the vehicle's condition and mileage is built into ACV.

Each coverage carries its own deductible, applied per occurrence. Collision and OTC deductibles are stated separately on the declarations and can differ (e.g., $500 Collision, $100 OTC).

Worked numeric examples

Example 1 - Collision total loss. A covered auto with an ACV of $14,000 is wrecked. The Collision deductible is $500. The car is a total loss.

• Insurer pays: ACV $14,000 - $500 deductible = $13,500.

Example 2 - OTC deer strike. The same auto strikes a deer, causing $3,200 in damage. The loss is Other Than Collision, and the OTC deductible is $100.

• Insurer pays: $3,200 - $100 = $3,100. Using the wrong (Collision) deductible of $500 is the classic exam error.

Example 3 - repair vs. ACV cap. A $2,000 ACV auto needs $2,600 in repairs after a collision. Part D pays the lesser amount, so payment is capped at ACV $2,000 minus the $500 deductible = $1,500 (the insurer would typically settle as a total loss).

Transportation expenses and supplementary Part D limits

Part D also provides limited transportation expenses (rental reimbursement / loss of use): typically $20 per day, up to $600 maximum in the unendorsed form, for theft of the entire auto or for a covered non-theft loss. A waiting period applies for theft (the form requires the theft to last more than 48 hours before transportation expense begins). Higher rental limits require an endorsement. The form also pays towing and labor only if the Towing and Labor Costs Coverage option is purchased and shown on the declarations.

What counts as "your covered auto" for Part D

Physical damage follows the covered auto definitions: vehicles shown in the declarations, a newly acquired auto, a trailer you own, and certain temporary substitute autos. The exam tests the newly acquired auto rule closely.

For an additional auto, Part D coverage applies automatically only if the insurer is asked to insure it within the form's reporting window (commonly 14 days). For a replacement auto, broad coverage may carry over, but the insured must still request Collision/OTC if the replaced auto carried it - a replacement with no physical-damage coverage on the prior auto gets none automatically. Failing to report inside the window is a frequent reason a new-car claim is denied.

Glass and the Collision election

Breakage of glass is normally an Other Than Collision loss. However, when glass breaks in a collision, the PAP lets the insured elect to have all glass damage treated as Collision so that only one deductible applies to the whole event instead of separate Collision and OTC deductibles. This election prevents double-deductible stacking on a single accident. Many insurers also offer full glass coverage by endorsement that waives the deductible entirely for windshield repair, a benefit examiners contrast with the unendorsed deductible-based treatment.