Author: Bill Wilson
Not infrequently, an auto suffers a physical damage loss. There's no question that the loss is covered...the only issue is whether the loss is covered as a collision or an other-than-collision (comprehensive) loss. In this article, we'll examine several "Ask an Expert" claims, and we'll show a simple (if incomplete) solution to this problem.
Is it comp or is it collision? Is it live or is it Memorex? OK, I'm dating myself here, but the comprehensive vs. collision debate is one we hear often in auto claims. Here are some questions our "Ask an Expert" service has received:
"An insured was driving along the highway, the hood somehow became unhooked, flew up and smashed into the windshield causing $2,400 damage to the windshield and hood. What is it? Comp claim or collision?"
"A car was jacked and the jack slipped, causing the car to fall to the ground and break the rear axle. The adjuster says the car collided/hit the ground and the collision deductible applies. True?"
"An insured, with the help of another person, was carrying a small refrigerator past (over the hood of) the car and put some deep scratches on the top of the hood as it passed over the car. The refrigerator did not leave the hands of the people carrying it when the loss occurred. Please let me know if you would interpret the policy to cover this loss under Collision or Other Than Collision."
"A guy, discovering thieves on his loading dock, pulls his car across the exit in the fence to block them in. They ram his car and escape. The adjuster said this was clearly a collision between two vehicles. It went to court and the court said it wasn't."
"One of our personal lines customers had an auto claim. The insured was driving down the highway and someone had spilled a large amount of paint in the road. The insured unknowingly drove thru the paint and it splattered up onto the car. The insurance carrier wants to pay it as collision. The producer wants this to be 'Other than Collision' claiming the paint to be missiles or flying objects. Webster’s shows a missile as 'an object thrown or projected so as to strike something at a distance.' Have others had this issue?"
"Our insured drove through a puddle of paint from a can that had fallen off a truck and the car's finish was damaged from the paint that sprayed up. The truck that lost the paint can was not identified and, therefore, they can't go back to that entity. The company says this is a collision loss (collision with an object - the puddle of paint) and the agent contends it is a comprehensive loss. I can see both arguments - any thoughts?"
"If a rock or flying debris is kicked up by another vehicle or is just in the air for unknown reasons and hits a windshield, it is a comp claim. If it hits the hood or other part of the vehicle it is classified as a collision claim. Is there a law that specifically defines why the location of debris impact on the vehicle determines they type of loss? What is the reasoning for this? Any information would be appreciated."
While most physical damage claims can easily be categorized as Collision or Other Than Collision (i.e., "comprehensive"), sometimes this isn't as simple a matter as it would appear.
Here's what the ISO PP 00 01 01 05 Personal Auto Policy says:
"Collision" means the upset of "your covered auto" or a "non-owned auto" or their impact with another vehicle or object.
Loss caused by the following is considered other than "collision":
1. Missiles or falling objects;
2. Fire;
3. Theft or larceny;
4. Explosion or earthquake;
5. Windstorm;
6. Hail, water or flood;
7. Malicious mischief or vandalism;
8. Riot or civil commotion;
9. Contact with bird or animal; or
10. Breakage of glass.
If breakage of glass is caused by a "collision", you may elect to have it considered a loss caused by "collision".
In a general sense, "collision" is a single named peril coverage, while "other than collision" is an all-risk coverage. If you can demonstrate that it isn't a collision then, barring any exclusions in the policy, it must be a comprehensive loss.
In the flying/falling hood claim above, our consensus was that this was not a collision. Since no other exclusions applied, it must therefore be a comprehensive loss. The argument hinges around the "definition" of collision..."impact with ANOTHER vehicle or object." Since the hood is part of the subject vehicle, our argument is that the loss cannot be a collision since that would require the vehicle striking a secondary vehicle or object.
This is similar to a court case a number of years ago. A car was jacked up on the driver's side to change a flat tire. The jack slipped, causing the vehicle to drop and break the rear axle—the low repair estimate was $800. The insurer wanted to apply a $200 collision deductible on the basis that the vehicle "collided" with the ground. The case went to court and the decision was that, since the passenger side tires were still in contact with the ground, the vehicle couldn't collide with something that it was already in contact with. In fact, the court ruled that the vehicle was a falling object and ordered that the $100 comprehensive deductible applied.
In the second claim cited above involving movement of a refrigerator, it becomes tougher to make a clear determination. When we submitted this "Ask an Expert" claim to our personal auto faculty, those responding voted 4-2 for this being a comprehensive claim. The majority felt that this just wasn't a "collision" as contemplated by the drafters of the policy.
However, those voting for the loss being a collision claim, made the following argument:
As I see it, this is a collision loss. The policy wording says impact with another object. Since it was being held at the time the incident occurred it would not be a falling object. Black's Law Dictionary, 6th Edition defines collision as:
"Striking together of two objects, one of which may be stationary. Act or instance of colliding; state of having collided. The term implies an impact or sudden contact of a moving body with an obstruction in it's line of motion or one stationary and the other, no matter which, in motion."
As the occurrence is not one of the delineated perils excluded from collision and seems to fit a legal definition of an object in motion having an impact with another object, I say collision.
So, again, this is one of those situations that can be argued either way. When either interpretation is reasonable, courts tend to side with the insured who did not draft the situationally ambiguous policy language. So if both arguments are plausible, I'd say that "justice" would be best served by charging the lower deductible for a comprehensive loss.
These claims are not isolated incidents. For example, in another claim, the insured was in the process of parking his car when the garage door "fell" on it. Being startled, he tried to slam on the brakes, but hit the gas instead and ran through the back wall of his garage. In this actual court case, this was deemed to be a comprehensive loss since the door, as a falling object, set off an uninterrupted sequence of events leading to the damages.
In another case, an insured visited his favorite tavern until about 1:00 a.m., then drove by the supermarket that he managed. He discovered a gang of thieves loading merchandise on a rear loading dock. He pulled his car across the open gate in the fence around the delivery area in order to block their exit and they rammed his car to escape. The insurer agreed to pay the loss, but wanted to apply the collision deductible. When the case went to court (yes, people will file suit over a relatively trivial difference in deductibles), the court ruled that this was a comprehensive claim...an act of vandalism. (BTW, don't forget that claims of this type could fall under UM PD if available in your state.)
On the question about why debris striking the windshield is a comp claim but striking another part of the body is a collision, the answer probably lies in the policy provision related to glass breakage. Glass breakage by any nonexcluded cause is usually considered a comprehensive claim; however, if caused by collision, the insured can elect to consider it a loss by collision, as specifically outlined in the policy excerpt above. This is to prevent the insurer from applying two deductibles: one for comprehensive (glass breakage); and one for collision (damage to the rest of the auto). Of course, if the only damage is to the glass, then the insured would want to consider it as a comprehensive claim since the deductible is usually lower than the collision deductible and losses are usually not chargeable.
Finally, with regard to the paint claims, we ran this by our VU faculty and got the following observations:
I guess market conditions are beginning to affect coverage interpretations. This should be a comprehensive or "other than collision" loss. Denting the car by running over a paint can in the road is a collision claim. Having your car get hit with overspray when someone paints nearby is a comprehensive loss. If the insured tripped carrying a bucket of paint and spilled it on the car, it would be a comprehensive loss.
Collision is defined as "impact with another vehicle or object." Characterizing the car's contact with the paint as an "impact" is stretching the language a bit. One doesn't normally "collide" with puddles, paint or otherwise. Similar claims that are paid under "other than collision": (1) Cars that inadvertently drive into bodies of water and suffer water damage, (2) tree sap falls on the car damaging the finish, and (3) paint is damaged by "acid rain." If the damage in direct and accidental and it's not a "collision", then it's "other than collision".
Sometimes insured's want their entire car repainted in situations like this, when it could probably be "buffed out." Sometimes adjusters will take a position like this in response. Sometimes they just don't know how it should be covered.
Since the damage was not to the tire, the point of any collision, but to the upper surfaces which didn't collide with the puddle itself, why not consider the various drops of paint missiles?
I've seen these type of losses paid as collision over the years when the can itself was hit and the paint released as a result of the car running over the can. On the other side I have seen losses involving cars who ran over either freshly painted road surfaces or spilled paint on the road paid as comp losses.
I don't think you can "collide" with a puddle...you run through it or over it. Also, collision requires contact with another vehicle or object...I don't think a puddle, in the normal sense, is an "object." I've seen these types of claims paid as comprehensive losses for years. More important, collisions are usually "chargeable" from the standpoint of rating points because they are generally preventable or avoidable by the insured. Comprehensive claims (e.g., "contact with a bird or animal"), on the other hand, are usually behond the control of the insured. In a case like this, it's unlikely that the insured could avoide the damage, so it doesn't seem equitable to potentially charge the insured for this type of accident.
This is clearly an Other than Collision claim. The physical damage insuring agreement pays for “direct and accidental loss” to a covered auto. Loss is then split into two categories, Collision and Other than Collision. Collision is defined as the “upset” or “impact with another vehicle or object.” The policy then goes on to identify several types of losses like fire, vandalism and falling objects that will be considered “Other than Collision,” even though some of them involve impact with an object. Nowhere does the policy say that the 10 listed OTC perils are the only losses that will be considered OTC. Since the insuring agreement pays for all direct loss, losses that aren’t don’t involve a collision would clearly be “other than collision.” To characterize the splattering of paint as a “collision” is ludicrous.
In a similar claim, an insured was following a state highway truck spraying de-icing chemical on the roadway. The deicing chemical reacted with the insured’s expensive aluminum alloy wheels, pitting and corroding them in a matter of minutes. The company paid under “other than collision,” even though no listed peril applied.
This mistake happens a lot. Evidently many adjusters think that for something to be considered “other than collision” it has to be on the list of 10 OTC perils. It doesn’t, as explained in this article.
"Collision" is usually defined as the upset of your covered auto or its impact with another vehicle or object. Any direct loss, not otherwise excluded, that does not meet the collision definition is considered other than collision (aka comp). My dictionary defines "impact" as: 1. the striking of one body against another; 2. the force of such a striking; 3. to collide with; strike forcefully; or 4. to have impact or make contact forcefully. It doesn't sound like the vehicle "impacted" the paint. If the insured drove under a bridge that was being painted and the vehicle was damaged by paint spray, it would be a comprehensive loss. I think the adjuster needs to take another look at this and pay it as a comp claim.
So, what can one do to avoid these disagreements? The answer is simple, though it flies in the face of tradition. Use the same deductible amount for both comp and collision coverages. Admittedly this doesn't solve the potential problem of most collision claims being "chargeable" accidents compared to most comprehensive claims, but the frequent litigation most often arises simply from the difference in deductibles...believe it or not.
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