7.1 Part D: Coverage for Damage to Your Auto
Key Takeaways
- Part D is first-party physical damage coverage split into Collision and Other Than Collision, each with its own deductible.
- Collision = upset or impact with a vehicle/object; OTC = fire, theft, glass, weather, vandalism, animal contact, and falling objects.
- Loss settlement is the lesser of ACV (replacement cost minus depreciation) or repair/replace cost, minus the deductible.
- Base Transportation Expenses pay $30/day up to $900; theft losses have a 48-hour waiting period.
- Hitting an animal is OTC, but swerving to miss it and striking a fixed object is Collision.
Part D of the ISO Personal Auto Policy
Part D of the ISO Personal Auto Policy (PAP, form PP 00 01 09 18) is the physical damage section. While Parts A (Liability), B (Medical Payments), and C (Uninsured Motorists) protect against losses to other people, Part D pays for direct and accidental loss to a covered auto and its equipment. Unlike liability, Part D is first-party coverage: the insurer pays the named insured, not a third party. It is also entirely optional from a state-mandate standpoint, but lenders require it on any financed or leased vehicle.
Part D opens with the insuring agreement and then splits into two named perils: Collision and Other Than Collision (OTC, historically "comprehensive"). Each is a separate coverage with its own deductible, and a vehicle can carry one without the other. The exam loves testing which peril applies to a given fact pattern, so master the dividing line.
Collision vs. Other Than Collision
The PAP defines Collision as "the upset of your covered auto or its impact with another vehicle or object." Everything else that is not collision and not excluded falls under Other Than Collision. Because the form defines collision narrowly and then sweeps the rest into OTC, exam questions frequently hinge on classification.
The form expressly lists losses that are deemed OTC (not collision). Memorize this list:
| Other Than Collision (OTC) losses | Collision losses |
|---|---|
| Missiles or falling objects | Striking another car |
| Fire | Striking a guardrail, pole, tree |
| Theft or larceny | Rolling the vehicle over (upset) |
| Explosion or earthquake | Backing into a wall |
| Windstorm, hail, water, flood | Impact with a building |
| Malicious mischief or vandalism | — |
| Riot or civil commotion | — |
| Contact with a bird or animal | — |
| Breakage of glass | — |
Trap: Hitting a deer is OTC ("contact with a bird or animal"), but swerving to avoid a deer and hitting a tree is Collision. Glass breakage can be claimed under either peril, but if it results from a collision the insured may elect to have it treated as OTC to use the OTC deductible. A flood that submerges a parked car is OTC; the car sliding off a flooded road into a ditch is collision.
Loss settlement: ACV and the limit of liability
The Part D limit of liability is the lesser of: (1) the actual cash value (ACV) of the stolen or damaged property, or (2) the amount necessary to repair or replace the property with other property of like kind and quality. ACV is generally replacement cost minus depreciation. The insurer may pay the loss in money or repair/replace at its option, and may return stolen property with payment for any damage.
Worked ACV example. A 6-year-old sedan is totaled in a collision. Replacement cost of a comparable used vehicle is $18,000; the adjuster applies $6,000 depreciation. The collision deductible is $500.
- ACV = $18,000 − $6,000 = $12,000
- Less deductible $500 → insurer pays $11,500
If instead the repair estimate were $9,000 (car not a total loss), the insurer pays the lesser figure: $9,000 − $500 = $8,500. The deductible applies per occurrence to each coverage separately.
Coverage extensions and sub-limits
Part D includes built-in features the exam tests on:
- Transportation Expenses: Pays $30 per day / $900 maximum for (a) a temporary substitute auto when your covered auto is stolen (after a 48-hour waiting period) or (b) loss of use due to a covered OTC/collision loss. Higher limits available by endorsement PP 03 06.
- Towing and Labor: Available by endorsement PP 03 03, not built into the base form.
- Electronic equipment / custom equipment: Permanently installed equipment is covered; the base form limits non-original sound/electronic equipment unless added by PP 03 13.
- Newly acquired autos: Covered if the insured asks the company to insure it within 14 days (additional auto) or by the next renewal for replacement autos, with conditions.
Trap: Transportation expense for a theft loss begins 48 hours after the theft is reported, but for a collision/OTC loss that disables the car it begins when the car is withdrawn from use for more than 24 hours.
Deductibles, Total Loss, and Betterment Under Part D
Part D (physical damage) settles at the lesser of the auto's ACV or the cost to repair/replace, minus the deductible - the limit is not a stated dollar figure but the car's value.
| Coverage | Typical trigger | Deductible |
|---|---|---|
| Collision | Impact with object/vehicle or overturn | Applies |
| Other Than Collision (Comprehensive) | Fire, theft, glass, hail, animal strike, flood | Applies (glass often waived) |
Exam trap: Hitting a deer is Other Than Collision, not collision. Swerving to miss it and striking a tree is collision - a classic single-question distinction.
Total Loss and Betterment
When repair cost approaches ACV, the insurer declares a total loss, pays ACV minus deductible, and takes the salvage.
A deer runs into the road; the insured swerves, misses the deer, and strikes a utility pole. Under PAP Part D, this loss is classified as:
An insured's covered auto is stolen and reported to the insurer. The PAP base Transportation Expenses coverage will reimburse a rental at a maximum of:
Key exam framing
Remember the structural logic: Part D is first-party, optional by statute but lender-required, and pays on an ACV/lesser-of basis subject to a per-coverage deductible. Classification questions almost always reduce to one rule: did the auto upset or impact a vehicle/object? If yes, Collision. If the cause is fire, theft, glass, weather, vandalism, or an animal, it is OTC. Keep the $30/$900 transportation figures and the 14-day newly-acquired-auto window committed to memory.