Coverage for Damage to Your Auto
Domain 5 - Coverage for Damage to Your Auto
This domain tests Part D. You must distinguish collision from other-than-collision, apply deductibles and valuation rules, and recognize the exclusions that surprise customers.
Collision and other-than-collision
Part D pays for direct and accidental loss to a covered auto. Collision means hitting or being hit by another object or vehicle, or upset (rollover). Other-than-collision (often called comprehensive in the marketplace) includes fire, theft, vandalism, hail, flood, falling objects, and collision with an animal. The deductible applies separately to each loss.
Payment is the lesser of actual cash value or the cost to repair, less the deductible. The insurer may use repair estimates, appraisal, or salvage. Betterment can reduce the payment when old parts are replaced with new ones.
Key exclusions and limits
- Wear and tear, freezing, mechanical or electrical breakdown, and road damage to tires.
- Custom equipment, sound equipment, and radar detectors unless specifically declared.
- Livery use, racing, and use in the business of selling or repairing autos.
- Transportation expenses are typically $20 per day up to $600 under the ISO PAP, and towing and labor is a modest separate limit.
Worked example
A client with a $500 collision deductible and a $250 other-than-collision deductible hits a deer, causing $6,000 in damage. The claim is paid under other-than-collision, not collision, because animal contact is an other-than-collision peril. The client pays $250, not $500. The reasoning: the peril, not the fact that the car was moving, determines the coverage part and the deductible.
Traps
- Saying “comprehensive” as if it were the policy’s coverage part; the PAP uses “other than collision.”
- Classifying a deer strike as collision.
- Assuming aftermarket wheels, stereos, or a radar detector are automatically covered.
- Forgetting that deductibles apply per loss, not per policy period.
- Overlooking the difference between ACV and replacement cost; the PAP does not pay new-car replacement cost unless endorsed.