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🛡️ '''Automobile physical damage insurance''' covers the cost of repairing or replacing the insured's own vehicle when it is damaged or destroyed, regardless of who was at fault. Unlike [[Definition:Auto liability insurance | auto liability insurance]], which responds to third-party claims, physical damage coverage is a first-party protection and is typically divided into two sub-coverages: [[Definition:Collision coverage | collision]], which applies when the vehicle strikes another object or overturns, and [[Definition:Comprehensive coverage | comprehensive]] (also called "other than collision"), which covers perils like theft, hail, fire, vandalism, and animal strikes.

🔧 When a covered loss occurs, the [[Definition:Policyholder | policyholder]] files a [[Definition:Claim | claim]], and the [[Definition:Insurance carrier | carrier]] inspects the vehicle — often through a network of preferred repair shops or, increasingly, via photo- or video-based [[Definition:Virtual claims adjustment | virtual inspections]]. The insurer pays the lesser of the repair cost or the vehicle's [[Definition:Actual cash value | actual cash value]], minus the applicable [[Definition:Deductible | deductible]]. In [[Definition:Commercial lines | commercial]] contexts, fleets may carry physical damage on a scheduled or blanket basis, and large accounts sometimes elect higher deductibles or [[Definition:Self-insured retention (SIR) | self-insured retentions]] to lower [[Definition:Premium | premium]] spend. [[Definition:Underwriting | Underwriting]] considers vehicle age, value, use type, garaging location, and driver history. For [[Definition:Leasing | leased]] or financed vehicles, lenders typically require physical damage coverage to protect their collateral interest.

💰 Automobile physical damage insurance has been under significant profitability pressure in recent years due to rising repair costs, semiconductor-driven vehicle price inflation, and the growing complexity of advanced driver-assistance systems embedded in modern cars. [[Definition:Catastrophe loss | Catastrophe events]] — particularly hailstorms and floods — can produce sudden surges in comprehensive claims that stress [[Definition:Loss ratio | loss ratios]] across entire regions. Carriers are responding with [[Definition:Telematics | telematics]]-informed pricing, [[Definition:Parametric insurance | parametric]] supplements for weather-related damage, and partnerships with [[Definition:Insurtech | insurtech]] firms that streamline the claims-to-repair pipeline, all aimed at keeping this essential coverage sustainable for consumers and profitable for writers.

'''Related concepts'''
{{Div col|colwidth=20em}}
* [[Definition:Collision coverage]]
* [[Definition:Comprehensive coverage]]
* [[Definition:Actual cash value]]
* [[Definition:Auto liability insurance]]
* [[Definition:Deductible]]
* [[Definition:Telematics]]
{{Div col end}}

Definition:Automobile physical damage insurance - Revision history

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