Physical Damage Coverage
Auto insurance coverage that pays for damage to your own vehicle from collisions, weather, theft, vandalism, or other covered perils. It typically includes both collision coverage (for crashes) and comprehensive coverage (for non-collision events).
Example
“After Maria's car was damaged in a hailstorm and fender-bender in the same week, her physical damage coverage paid for both the comprehensive and collision claims.”
Memory Tip
Physical Damage = Your Physical car - it covers damage TO your car, not damage FROM your car.
Why It Matters
Without physical damage coverage, you pay out-of-pocket for vehicle repairs or replacement, which can cost thousands or tens of thousands of dollars. This coverage protects your transportation and financial investment in your vehicle.
Common Misconception
People often think liability insurance covers their own vehicle damage, but liability only pays for damage you cause to others. Physical damage coverage is separate and optional in most states, though lenders typically require it on financed vehicles.
In Practice
John's $25,000 car slides into a guardrail during an ice storm, causing $8,000 in damage. His physical damage coverage includes a $1,000 collision deductible, so his insurance pays $7,000 while John pays $1,000. Without this coverage, John would have paid the entire $8,000 repair bill himself.
Etymology
The term developed in early 20th century auto insurance to distinguish coverage for physical harm to vehicles from liability coverage for harm to other people or property.
Common Misspellings
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Related Terms
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See Also
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