7.1 Part D Coverage for Damage to Your Auto
Key Takeaways
- Part D is first-party coverage for the insured's own auto and contains two separately purchased coverages — Collision and Other Than Collision (Comprehensive) — each with its own deductible.
- Collision is upset or impact with a vehicle or object and pays regardless of fault; Other Than Collision covers theft, fire, glass, flood, hail, vandalism, falling objects, and animal strikes.
- Hitting an animal such as a deer is an Other Than Collision loss, not Collision — but striking a tree while avoiding the deer is Collision.
- Part D pays the lesser of ACV (replacement cost minus depreciation) or the repair/replace cost with like kind and quality, minus the deductible; it is not replacement-cost coverage.
- GAP / loan-lease payoff is needed when the loan balance exceeds ACV; transportation expense applies after a theft of the entire auto subject to a daily limit and maximum.
Part D: First-Party Physical Damage
Part D — Coverage for Damage to Your Auto of the ISO Personal Auto Policy (form PP 00 01) is first-party coverage: it pays to repair or replace your own vehicle. This contrasts with Part A (Liability), which is third-party coverage paying for damage you cause to others. On the exam, the single most common trap is direction of payment — Part D protects your property; Part A protects the other party's property.
Part D is an optional coverage in most states (no financial responsibility law requires it), but a lienholder — the bank or finance company — will contractually require both Collision and Other Than Collision while the loan or lease is open. Each of the two coverages carries its own separate deductible, and the insured may buy one without the other.
Collision
Collision is defined as the upset (overturn) of your covered auto or its impact with another vehicle or object. Collision pays regardless of fault: if you cause the wreck, your own Collision coverage still repairs your car after the deductible, and the insurer may subrogate against an at-fault third party to recover what it paid.
Tested examples of Collision losses:
- Striking another car, a guardrail, a tree, or a building
- Backing into a pole
- Rolling or overturning the vehicle
- Pothole impact damage
Other Than Collision (Comprehensive)
Other Than Collision (OTC), historically called Comprehensive, pays for direct and accidental loss to your auto from causes other than collision. It is the second of the two Part D coverages and usually carries a lower deductible because the perils are largely outside the driver's control.
| Peril | Tested example |
|---|---|
| Theft / larceny | Entire vehicle stolen |
| Fire / explosion | Engine compartment fire |
| Glass breakage | Cracked windshield |
| Flood / rising water | Vehicle submerged |
| Hail / windstorm | Hail dents, flying debris |
| Vandalism / malicious mischief | Keyed paint |
| Falling objects | Tree limb on roof |
| Contact with a bird or animal | Deer strike |
| Riot or civil commotion | Damage during unrest |
Classic exam trap: hitting a deer or other animal is an Other Than Collision (Comprehensive) loss — NOT Collision — even though there is an impact. Likewise, glass breakage is OTC. But swerving to avoid a deer and striking a tree is Collision.
An insured swerves to miss a deer, leaves the road, and strikes a tree. Under the ISO PAP Part D, this loss is settled as:
Loss Settlement: ACV and the LKQ Standard
Part D pays the lesser of the Actual Cash Value (ACV) of the stolen or damaged property or the amount necessary to repair or replace it with property of like kind and quality (LKQ), minus the deductible. The PAP is not a replacement-cost policy on the vehicle — depreciation is deducted.
ACV = Replacement Cost − Depreciation.
Worked numeric (total loss): A 6-year-old sedan is stolen. Its ACV is $12,000. The OTC deductible is $500. The insurer pays $12,000 − $500 = $11,500. If the owner still owes $14,000 on the auto loan, the $2,500 gap is the owner's exposure unless GAP coverage / loan-lease payoff was purchased.
Worked numeric (partial loss): A covered Collision causes $3,200 in repairs. With a $1,000 Collision deductible, the insurer pays $3,200 − $1,000 = $2,200. If repairs had exceeded ACV (say repairs of $13,500 on a $12,000 ACV auto), the insurer would declare a total loss and pay ACV minus the deductible rather than the inflated repair bill.
Supplementary Part D Benefits
Transportation Expenses: After a theft of the entire auto, Part D pays temporary transportation (rental or transit) at a stated per-day amount up to a maximum — typically $20 per day / $600 maximum in the base form. For other Part D losses (not theft), this benefit applies only if the carrier or a non-owned auto is in for repairs and a waiting period is satisfied. Higher limits (e.g., $30/$900) can be endorsed.
Towing and Labor (PP 03 03): A separate endorsement pays towing and on-site labor up to a small limit (e.g., $50–$75 per disablement). It is NOT automatically included in Part D.
No deductible for certain glass: Many insurers waive the deductible on windshield glass repair (not full replacement) to encourage prompt fixing of small chips. This is a filed option, not a guaranteed PAP provision.
Diminution in value: The base PAP does not pay for the loss of resale value after a properly repaired vehicle (diminished value) — a frequently missed point.
Deductible Mechanics and "Your Covered Auto"
The deductible is the retained amount the insured absorbs on each Part D loss; it is per loss, per coverage, not annual. If both Collision and OTC apply to one event (rare), each deductible could theoretically attach, but a single peril triggers a single deductible. Choosing a higher deductible lowers premium because the insured self-insures small claims and the carrier avoids handling-cost-heavy minor losses.
Part D follows the definition of "your covered auto," which includes any vehicle shown in the Declarations, a newly acquired auto, a trailer you own, and a temporary substitute vehicle used while yours is out of service.
A newly acquired auto gets automatic coverage, but the rules differ by situation: an additional car typically must be reported within 14 days, while a replacement car receives broad physical-damage coverage that may require reporting within 14 days to keep Collision/OTC if you carried it on the replaced auto. Failing to report a newly acquired auto within the window can leave a gap at exactly the moment a new-car total loss is most painful.
A covered auto with an ACV of $10,000 sustains $11,500 in collision damage. The Collision deductible is $1,000. The insurer will most likely pay: