10.1 PAP Part D Physical Damage, the Windshield Rule and ACV Settlement
Key Takeaways
- PAP Part D splits physical damage into collision, meaning impact with another object or upset, and other than collision, which covers fire, theft, flood, hail, falling objects, glass breakage and animal impact.
- Under F.S. § 627.7288 the deductible provisions of a Florida motor vehicle policy providing comprehensive or combined additional coverage may not be applied to damage to the windshield.
- Part D excludes wear and tear, freezing, mechanical or electrical breakdown, and road damage to tires unless the loss results from the total theft of the auto.
- Actual cash value settlements deduct depreciation from replacement cost, and betterment is charged only where a repair leaves the insured demonstrably better off than before the loss.
Auto Physical Damage, Total Loss Settlement & Residual Markets
Quick Answer: Under Personal Auto Policy (PAP) Part D, physical damage is divided into Collision (impact with an object/vehicle or rollover) and Other-Than-Collision (OTC / Comprehensive), which covers flood, storm surge, theft, fire, falling objects, and animal strikes. Under F.S. § 627.7288, Florida mandates a $0 deductible for windshield repairs and replacements under comprehensive coverage. In total loss adjustments, Florida enforces the 80% statutory rule (F.S. § 319.30): a vehicle is totaled when repair costs plus salvage value equal or exceed 80% of its Actual Cash Value (ACV). Vehicles are branded as Salvage (rebuildable) or assigned a Certificate of Destruction (scrap only). High-risk drivers unable to obtain voluntary coverage are insured through the FAJUA (F.S. § 627.311).
Handling automobile property damage claims in Florida requires specialized statutory knowledge beyond standard insurance policy interpretation. From tropical storms generating severe flood and storm surge damage to high-frequency collision claims along Florida's highway corridors, property and casualty claims adjusters regularly calculate Actual Cash Value (ACV), evaluate statutory total loss thresholds under Florida title laws, and navigate residual auto markets.
1. PAP Part D: Coverage for Damage to Your Auto
PAP Part D is first-party property coverage for physical loss to "your covered auto" or any "non-owned auto" (such as a temporary loaner vehicle, rental car, or borrowed vehicle). Coverage is purchased under two distinct insuring agreements, each with its own separate deductible:
PAP PART D COVERAGES
│
┌──────────────────────────────────┴──────────────────────────────────┐
▼ ▼
COLLISION OTHER-THAN-COLLISION (OTC)
• Impact with another vehicle • Missiles or falling objects
• Impact with stationary object (pole, guardrail) • Fire, theft, explosion, earthquake
• Upset / Overturn / Rollover • Windstorm, hail, WATER OR FLOOD
• Subject to separate collision deductible • Vandalism, riot, contact with bird/animal
• Glass breakage ($0 Windshield Ded in FL)
Collision Coverage
Collision is contractually defined as the upset (overturn/rollover) of your covered auto or its impact with another vehicle or object. Examples include:
- Crashing into another vehicle at an intersection
- Striking a guardrail, concrete barrier, or telephone pole
- Backing into a parked vehicle or mailbox
- Rolling over in a drainage canal or swale after losing steering control
Other-Than-Collision (OTC / Comprehensive) Coverage
Other-Than-Collision (OTC) coverage provides broad open-peril protection for accidental direct physical loss caused by perils other than collision. The standard ISO contract explicitly enumerates these perils:
- Missiles or falling objects (tree limbs, roof tiles thrown by wind)
- Fire or lightning
- Theft or larceny
- Explosion or earthquake
- Windstorm
- Hail, water, or flood (paramount in Florida for vehicles submerged during hurricanes)
- Malicious mischief or vandalism
- Riot or civil commotion
- Contact with a bird or animal (striking a deer, dog, or bird)
- Breakage of glass
Exam Trap: Animal Strikes Are OTC, Not Collision!
A frequent test question involves an insured striking a deer or large animal on the roadway. Even though an impact occurs, the ISO contract specifically defines contact with a bird or animal as an Other-Than-Collision loss, meaning the lower OTC deductible applies rather than the collision deductible.
2. Florida's Zero-Deductible Windshield Mandate (F.S. § 627.7288)
Florida features a distinctive statutory rule regarding motor vehicle glass claims that every claims adjuster must know:
- The Rule: Under F.S. § 627.7288, any insurance policy providing comprehensive or other-than-collision coverage delivered or issued for delivery in Florida CANNOT apply any deductible to damage to the windshield of any covered motor vehicle.
- Public Policy Purpose: The Florida Legislature enacted this zero-deductible requirement to ensure that drivers immediately repair or replace cracked or shattered windshields that impair driver vision, without financial hesitation.
- Scope of the Mandate: The $0 deductible applies strictly to the windshield. It does not apply to side door glass, vent glass, back glass (rear windshields), or sunroofs/panoramic moonroofs, which remain subject to the standard OTC deductible.
- Recent Legislative Reforms (SB 1002 in 2023): Due to widespread predatory glass litigation and Assignment of Benefits (AOB) abuses, Florida banned the use of AOBs for auto glass repair and prohibited glass repair shops from offering cash, gift cards, or other financial inducements to motorists for filing windshield claims.
3. Loss Settlement Valuation: Actual Cash Value & Betterment
Under PAP Part D, the insurer's limit of liability for physical damage is the lesser of:
- The Actual Cash Value (ACV) of the stolen or damaged property; or
- The amount necessary to repair or replace the property with other property of like kind and quality (LKQ).
Actual Cash Value (ACV) Mechanics
In auto claims adjusting, ACV is defined as Replacement Cost minus physical depreciation:
Depreciation is calculated by examining:
- Vehicle mileage relative to model year average
- Overall physical, mechanical, and interior condition
- Pre-existing rust, scratches, or unrepaired collision damage
- Local market sales data for comparable vehicles (same make, model, trim, and options)
Betterment
If repairing a damaged vehicle requires installing brand-new major mechanical assemblies (such as a brand-new engine, new transmission, new battery pack, or new set of tires) that replace heavily worn parts, the repair effectively increases the vehicle's value beyond its pre-loss condition. The insurer is permitted to deduct a financial allowance for betterment (the policyholder pays for the percentage of useful life already consumed before the loss).
The 2023 Glass Reforms an Adjuster Must Apply With It
The zero-deductible rule made Florida glass claims a litigation industry, and two statutes now police it:
- F.S. § 627.7289 voids any assignment of post-loss motor vehicle glass benefits. For a motor vehicle policy issued or renewed on or after July 1, 2023, a policyholder may not assign glass replacement or repair benefits — including calibration or recalibration of advanced driver assistance systems — to the glass shop. Any such agreement is void and unenforceable, so the adjuster deals with the named insured, not the vendor.
- F.S. § 627.7291 prohibits steering in windshield claims. No person, including an insurer, agent or adjuster, may require the insured to use a particular repair facility as a condition of coverage, subject to the exceptions the statute allows.
Read together with § 627.7288, the picture is complete: the insured pays no deductible on the windshield, keeps the claim in their own name, and picks the shop.
Under a standard Personal Auto Policy (PAP) Part D, which of the following physical damage losses is covered under Other-Than-Collision (OTC / Comprehensive) coverage rather than Collision coverage?
A Florida insured's comprehensive coverage carries a $500 deductible. A rock thrown by a passing truck cracks the windshield, and replacement costs $650. What does the insurer pay?