7.1 Part D: Coverage for Damage to Your Auto
Key Takeaways
- Part D is first-party physical-damage coverage (repairs the insured's own auto); Part A pays for damage to others' property.
- Collision = upset or impact with another vehicle/object and pays regardless of fault; OTC/Comprehensive covers theft, fire, glass, flood, hail, vandalism, and animal contact.
- Hitting an animal is Other Than Collision; swerving to avoid one and hitting a tree is Collision.
- Settlement pays the lesser of ACV or repair/replacement cost, minus the deductible; ACV = replacement cost minus depreciation.
- Standard Part D does not cover the loan/lease gap; a separate gap endorsement is required.
First-Party Coverage for Your Own Vehicle
Part D - Coverage for Damage to Your Auto of the ISO Personal Auto Policy (current edition PP 00 01 09 18) is first-party protection: it pays to repair or replace the insured's vehicle. Contrast this with Part A liability, which pays for damage the insured causes to others' property. Part D sells two coverages an insured may buy separately, each carried with its own deductible on the Declarations page.
Key vocabulary the exam tests: a covered auto under Part D includes any vehicle shown on the Declarations, a newly acquired auto, a trailer owned by the insured, and a non-owned auto or temporary substitute - but a non-owned auto gets only the broadest physical-damage coverage applying to any auto on the Dec page.
1. 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 the insured is at fault, their own Collision coverage still repairs the car, subject to the deductible, and the insurer may later subrogate against an at-fault third party to recover.
Classic Collision examples: striking another car, hitting a guardrail, tree, pole, or building, backing into an object, rolling the vehicle, and pothole/road-surface impact.
2. Other Than Collision (Comprehensive)
Other Than Collision (OTC) - branded Comprehensive by most insurers - covers direct and accidental loss from causes other than collision. The form lists covered perils:
| Peril | Example |
|---|---|
| Theft or larceny | Vehicle stolen |
| Fire or explosion | Engine compartment fire |
| Glass breakage | Cracked windshield |
| Flood or rising water | Submerged in a flood |
| Hail, windstorm | Hail dents, blown debris |
| Vandalism, malicious mischief | Keyed paint, slashed tires (alone) |
| Falling objects | Tree limb on hood |
| Contact with bird or animal | Deer strike |
| Riot or civil commotion | Damage during unrest |
Exam alert: hitting an animal (deer, dog) is Other Than Collision, NOT Collision. But swerving to avoid a deer and striking a tree IS Collision - the loss is the impact with the tree, not the animal.
Collision vs. OTC Quick Reference
| Loss event | Collision | Other Than Collision |
|---|---|---|
| Hit another vehicle | Yes | No |
| Overturn / rollover | Yes | No |
| Hit guardrail / pole | Yes | No |
| Theft of the auto | No | Yes |
| Fire | No | Yes |
| Glass breakage | No | Yes |
| Flood / hail | No | Yes |
| Hitting a deer | No | Yes |
How Part D Settles a Claim
The Limit of Liability provision pays the lesser of:
- the vehicle's Actual Cash Value (ACV), or
- the cost to repair or replace the property with like kind and quality,
minus the applicable deductible. The exam phrasing is precise: ACV = Replacement Cost - Depreciation.
Worked partial loss: repair cost $5,000; ACV $15,000; deductible $500. Repair ($5,000) is the lesser figure, so the insurer pays $5,000 - $500 = $4,500.
Worked total loss: repair cost $12,000; ACV $10,000; deductible $500. ACV ($10,000) is the lesser figure, so the insurer pays $10,000 - $500 = $9,500, declares a total loss, and takes the salvage. When repair cost meets or exceeds ACV the auto is "totaled."
ACV depreciation example: a car with a $24,000 replacement cost and 40% depreciation has an ACV of $24,000 x (1 - 0.40) = $14,400; subtract a $500 deductible on a total loss and the insurer pays $13,900.
Deductibles
| Coverage | Common deductible options |
|---|---|
| Collision | $500, $1,000, $2,500 |
| Other Than Collision | $0, $100, $250, $500 |
| Glass-only (some states) | Often $0 - waived to encourage repair |
A higher deductible lowers the premium because the insured retains more of the small, frequent losses. The deductible applies per occurrence, separately to Collision and to OTC.
Transportation Expense and Loan/Lease Gap
Part D includes Transportation Expenses - a per-day benefit up to a stated cap (commonly $20-$30 per day, up to roughly $600 total) for substitute transportation after a covered theft of the auto or other covered loss; theft losses carry a 48-hour waiting period before the benefit starts and continue until the auto is returned or the claim is paid.
Gap exposure is the shortfall when a loan or lease balance exceeds the auto's ACV at total loss. If the insured owes $25,000 but ACV is only $20,000, the $5,000 gap is the borrower's problem - standard Part D pays only ACV. Closing it requires a separate loan/lease (gap) endorsement or lender-supplied gap product.
Towing and Newly Acquired Autos
Towing and labor are not automatically in Part D; they require the Towing and Labor Costs endorsement (PP 03 03), which pays a small per-disablement limit (commonly $25-$100) for road service.
A newly acquired auto receives the broadest physical-damage coverage the insured already carries on at least one auto, but the insured must ask for the coverage within the policy's grace period - 14 days for an additional auto, or 4 days if the new auto replaces a listed one and the insured carried no Collision/OTC. Miss the window and a physical-damage claim on the new auto can be denied - a frequent exam item.
An insured's covered auto is damaged when it strikes a deer that runs into the road. Which Part D coverage applies?
A totaled auto has a $12,000 repair estimate, a $10,000 ACV, and a $500 Collision deductible. How much does Part D pay?