Physical Damage Insurance covers damage to your vehicle caused by collisions and other covered events such as fire, theft, vandalism, falling objects, and weather-related losses. Coverage is typically split into collision and comprehensive, with limits based on the vehicle’s value and a deductible you choose.
The cost of Physical Damage Insurance varies based on the value of your vehicle, the deductible you select, and whether you carry collision, comprehensive, or both. Insurers also rate factors like the vehicle’s age, make and model, where it’s garaged, your operating radius, driver history, loss history, and the type of work you do (for example, local delivery versus long-haul). Higher stated values, lower deductibles, frequent claims, and higher-risk operations typically increase premiums, while clean records and well-maintained equipment can help keep costs lower.
You’re driving your vehicle on the highway when traffic suddenly stops. You brake hard but still hit the vehicle in front of you, and the impact damages your hood, bumper, radiator, and other front-end components. The vehicle isn’t drivable and has to be towed to a repair shop.
How coverage would work with numbers: The tow bill is $900 and the repair estimate is $18,500, for a total loss amount of $19,400. If your Physical Damage collision deductible is $1,000, you pay $1,000 and the insurance company pays $18,400 for covered repairs, as long as the cost is within the policy’s valuation and limit. If the vehicle is deemed a total loss, the payout is determined by the policy’s valuation method, minus the deductible.
