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

Part D: Coverage for Damage to Your Auto

Part D of the ISO Personal Auto Policy (PAP) — current edition PP 00 01 — is the first-party physical damage section. It pays for direct and accidental loss to your covered auto or any non-owned auto, including its equipment, minus the deductible. Unlike Part A liability, which Nevada mandates at 25/50/20 minimum limits, Part D is optional coverage. No Nevada statute requires collision or comprehensive, but finance companies routinely demand both before funding a vehicle purchase in Las Vegas, Reno, or any dealership lot statewide.

A covered auto for Part D includes any vehicle shown on the Declarations, a newly acquired auto, a trailer owned by the insured, and a temporary substitute vehicle used while the covered auto is out of service. A newly acquired auto generally receives automatic coverage for a limited window — commonly 14 days — if the insured already carries Part D on at least one vehicle on the policy. If the insured had no Part D at all, the new car arrives uninsured for physical damage until the producer adds it.

Part D is written in two distinct insuring agreements, each priced and deductible-rated separately:

• Collision — loss caused by the auto's impact with another vehicle or object, or by upset (overturn).
• Other Than Collision (OTC), also called Comprehensive — every other covered cause of loss not classified as collision.

Collision vs. Other Than Collision — The Core Sorting Rule

The single most-tested concept in Part D is placing a loss in the correct bucket. Collision means the auto struck something or rolled over. OTC is essentially everything else that damages the car without that impact-or-upset trigger.

The PAP lists OTC causes by example, including missiles or falling objects, fire, theft or larceny, explosion or earthquake, windstorm, hail, water or flood, malicious mischief or vandalism, riot or civil commotion, contact with a bird or animal, and glass breakage. Because the list is illustrative, OTC functions as the broad catch-all peril; if a loss is not Collision and is not excluded, it falls into OTC.

The last row is a deliberate exam trap: swerving to miss an animal and striking a guardrail is Collision, but striking the animal itself is OTC — the difference can mean two different deductibles on the same trip.

Exam trap: Hitting a deer is Other Than Collision, not Collision. Glass breakage from a flying rock is OTC. If glass breaks because the car rolled over, the insured may elect to treat it as Collision so a single deductible applies to the entire overturn loss.

Loss Settlement and the ACV Basis

Part D pays the lesser of (a) the Actual Cash Value (ACV) of the stolen or damaged property, or (b) the amount necessary to repair or replace it — then subtracts the deductible. The insurer may repair, replace, or pay cash; the insured cannot demand a brand-new vehicle.

ACV = Replacement Cost − Depreciation. Depreciation reflects age, mileage, and wear. This is why a total loss on an older vehicle often pays less than the loan balance, creating gap exposure addressed in section 7.3.

Worked ACV example — partial loss. A Henderson commuter rear-ends another vehicle. Repair estimate: $5,200. Vehicle ACV just before the loss: $6,000. Collision deductible: $500. Because repair cost ($5,200) is less than ACV ($6,000), the car is not a total loss. Part D pays repair cost minus deductible: $5,200 − $500 = $4,700.

Worked ACV example — total loss. A different vehicle has ACV of $7,800 and repair estimate of $9,400 after a collision. Because repair exceeds ACV, the car totals. Part D pays ACV minus deductible: $7,800 − $500 = $7,300. The insurer does not pay the full repair estimate when that figure exceeds the car's value.

Total-loss add-backs. On a total loss, many states require the insurer to add applicable sales tax and title/registration fees to the ACV settlement. Example: ACV $11,000, repair estimate $13,500, collision deductible $500, sales tax $700. Payment = $11,000 + $700 − $500 = $11,200.

Deductibles, Glass, and Transportation Expenses

Collision and OTC carry separate deductibles (commonly $250, $500, or $1,000). Only one deductible applies per occurrence. Raising the deductible lowers premium because the insured retains more small-loss risk — a standard producer conversation when a client wants to reduce a Clark County auto premium.

Many insurers offer full glass coverage (no deductible) by endorsement because windshield repair is common on Nevada freeways. Without that endorsement, a rock-chip claim is OTC subject to the comprehensive deductible.

Transportation Expenses pay a per-day rental or transit amount up to a stated maximum (e.g., $30/day, $900 maximum) plus coverage for loss-of-use the insured is legally liable for on a non-owned auto. For theft, a 48-hour waiting period applies before transportation expense begins. For other covered losses, coverage starts when the auto is disabled for more than 24 hours.

Transportation scenario. An insured's car is stolen from a Reno apartment lot on Monday morning. The insurer confirms a covered theft on Tuesday. Transportation expense begins 48 hours after the theft — not immediately upon reporting. If the car is found with engine damage from a covered collision and cannot be driven for 30 hours, transportation expense starts after the 24-hour disability threshold.

Nevada Producer Notes

Nevada's 25/50/20 liability minimums satisfy the financial responsibility law but leave a client's own vehicle unprotected without Part D. Producers should explain that lenders — not the Nevada Division of Insurance — typically force collision and OTC on financed vehicles. For clients driving into California or Utah on weekend trips, Part D territory matches Part A: the United States, its territories, Puerto Rico, and Canada — but not Mexico, which requires a separate policy.

Part D is first-party coverage: it pays the insured for damage to the insured's own auto. It does not pay third-party property damage — that belongs to Part A liability. Keeping that boundary clear prevents the classic exam error of selecting liability when the fact pattern describes hail on the insured's hood.