Part D: Coverage for Damage to Your Auto

In the insuring agreement, with Part D coverage, the insurance company agrees to pay an amount in excess of your deductible for direct and accidental loss to your covered car or any other car specified in the agreement. Thus, it pays for damage or theft to your car. In addition, collision and comprehensive coverage are available under Part D.

As its name implies, collision coverage covers collisions. A collision is the upset of your or someone else’s car or its impact with another vehicle or object. Thus, this coverage pays when you hit a telephone pole, when your car overturns, or when you bang your car door on something.

Collision coverage pays regardless of fault. The insurance company will pay even if you cause the damage. You still have to pay the deductible though.

If your car is damaged by another driver who is insured, you can either collect from his insurance company or from your insurance company. In the later case, your insurance company will recover an amount for the damages directly from the other driver’s insurance company.

Comprehensive coverage is often referred to as “other-than-collision loss” coverage. It covers specific situations or perils. These perils include:

  • Glass breakage,
  • Missiles or falling objects,
  • Fire,
  • Explosions and earthquakes,
  • Windstorms,
  • Hail, water and flood,
  • Mischief or vandalism,
  • Riot and civil commotions, and
  • Contact with birds and animals.

You have to pay a separate deductible for comprehensive coverage to apply. This deductible is in addition to the deductible for collision coverage. This is why many drivers opt not to have both types of coverage.

Part D coverage also applies to a nonowned auto. A nonowned auto is a private passenger car, pickup, van or trailer that is not owned by, furnished by, or made available for your (the insureds) or your family member’s regular use.

Thus, if you borrow your friend’s car and you have an accident. Your collision and comprehensive coverage on your car will apply to your friend’s car. However, your friend’s insurance will first cover any damage to his car before your insurance coverage kicks in.

Rental car agreements provide optional coverage to be relieved of financial liability for damage to or the loss of the rental car. This coverage is often referred to as Collision Damage Waiver or Loss Damage Waiver coverage.

Many drivers opt out of this coverage becuase:

  • It is expensive,
  • It has numerous exclusions, and
  • Your credit card used to rent the car may provide the same coverage.

Moreover, your collision and comprehensive insurance on your own car may provide the same coverage.

With Part D coverage, the insurance policy also pays for temporary transportation expenses. This coverage applies if you have a loss of your car or another car (such as a rental car).

These expenses include train, taxi, bus, and rental car costs. The expenses are paid up to a $20 a day and $600 total. There is no deductible to pay for this coverage to apply.

Coverage for labor and towing costs can be added to the coverage. This coverage kicks in when your car breaks down.

As with other types of coverage, Part D has several exclusions. These exclusions include:

  • Use of your car as a means of public transportation (i.e., a taxi),
  • Damage from freezing, mechanical or electrical breakdown, and wear and tear,
  • Contamination due to radiation or damage from war,
  • Some types of electronic equipment included on your car,
  • Compact disc, tape and record sound systems,
  • Confiscation by the government,
  • Loss to a trailer, camper, or motor home not listed in the declarations page,
  • Use of a nonowned car by you without a reasonable belief that you have permission to use the car,
  • Radar or laser detection equipment, and
  • Customized equipment such as bars, paintings, carpeting and furniture.

With Part D coverage, the amount paid for physical damage or loss to a covered vehicle is the lower of the actual cash value of the damaged or stolen property or the amount necessary to replace the property with other property of like kind and quality.

If the repairs exceed the car’s actual cash value, the insurance company may declare it a total loss. In this case, the insurance company pays the actual cash value less the amount of the deductible. The insurance company will also factor in the salvage value when determining if the loss is a total loss.

With losses that are not total losses, the insurance company will only pay an amount to repair or replace the damaged property. The insurance company can use the cost of generic auto parts rather than parts produced by the car manufacturer in computing the amount.

The insurance company has the option to pay for damage to a car or to repairing and replacing the car or equipment. You have the ability to dispute the value of the property damage loss. This can come in handy if the insurance company determines that your loss was less than the amount you feel was lost.