7.1 Part D Coverage for Damage to Your Auto (collision, other-than-collision)

First-Party Damage to the Insured's Own Vehicle

Part D - Coverage for Damage to Your Auto is the first-party segment of the Insurance Services Office (ISO) Personal Auto Policy (PAP), form PP 00 01. It pays to repair or replace the insured's own vehicle. Compare this to Part A (Liability), which pays for property of others the insured damages. A learner who keeps that first-party versus third-party line straight will answer most Part D questions correctly.

Part D contains two coverages the insured may purchase independently, each carrying its own deductible: Collision and Other Than Collision. A vehicle may carry both, one, or neither.

Collision Coverage

Collision is defined as the upset (overturn) of the covered auto or its impact with another vehicle or object. Collision pays regardless of fault: even when the insured causes the crash, Collision still repairs the insured's vehicle. The deductible applies, and the insurer may pursue subrogation against a responsible third party to recover what it paid.

Typical Collision losses include:

• Striking another car at an intersection
• Hitting a guardrail, utility pole, tree, or building
• Backing into a fixed object
• Rolling or flipping the vehicle in a single-car accident

Notice the common thread - all involve a physical strike or a rollover.

Other Than Collision (Comprehensive) Coverage

Other Than Collision (OTC), historically called Comprehensive, covers physical damage from causes other than a collision or upset. It is broad and named-peril-like in practice.

Exam alert: striking an animal (deer, dog) is Other Than Collision, never Collision. But if the driver swerves to avoid the deer and hits a tree, the resulting impact is a Collision loss - the testable variable is what the vehicle ultimately struck.

Collision vs. OTC Quick Reference

When both coverages are in force, the insured does not need to argue which applies - the practical concern is which deductible is charged, because OTC deductibles are usually lower than Collision deductibles.

How Part D Settles a Loss

The insurer pays the lesser of:

1. the vehicle's Actual Cash Value (ACV), or
2. the cost to repair or replace the damaged property,

minus the deductible. The governing formula is ACV = replacement cost minus depreciation.

Partial-loss example: repair estimate $5,000; ACV $15,000; deductible $500. Repair ($5,000) is the lesser figure, so the insurer pays $4,500.

Total-loss example: repair estimate $12,000; ACV $10,000; deductible $500. ACV ($10,000) is the lesser figure, so the insurer pays $9,500, declares a total loss, and takes the salvage. A vehicle is generally totaled once repair cost meets or exceeds ACV.

Deductibles and Transportation Expense

A higher deductible lowers the premium because the insured retains more of the frequent, low-severity losses. The deductible applies per occurrence, so two separate covered events in one policy term each carry their own deductible.

Part D also pays Transportation Expense - a per-day benefit (commonly $20 to $30 per day, up to about $600 aggregate) for substitute transportation after a covered loss, often subject to a waiting period for theft. The benefit begins when the loss occurs and ends when the vehicle is repaired, replaced, or the maximum is reached.

Gap trap: when the loan balance exceeds ACV - owe $25,000, ACV $20,000 = a $5,000 gap - standard Part D pays only ACV. The $5,000 shortfall requires a separate loan/lease gap endorsement.

Non-Owned and Borrowed Vehicles

Part D extends to a non-owned auto the named insured or a resident family member is operating - including a short-term rental car - but only at the broadest physical damage coverage already shown on the policy, and never to a vehicle furnished for the insured's regular use.

The practical rule the exam tests: if the insured already carries both Collision and Other Than Collision on a scheduled vehicle, that same coverage usually follows to a rental, subject to the policy deductible.

• Insured carries Collision + OTC on the personal car -> coverage typically follows to the rental
• Insured carries liability only -> no physical damage follows; the rental is exposed
• Vehicle furnished for regular use (a company car) -> not a covered auto under Part D

Many travelers still buy the rental company's collision damage waiver to avoid the deductible and loss-of-use disputes, but the default exam answer is that the insured's own broadest physical damage coverage extends to the rental.