Question

In automobile insurance, what is meant by other than collision coverage?

1) as the name implies, it is all inclusive. It combines property damage, bodily injury liability, property damage liability, medical payments and collision
2) it covers any direct or accidental loss of, or damage to, the insured's automobile, except collision
3) it covers all aspects of physical damage to the insured's automobile such as fire, theft, collision or flood
4) it insures against direct and accidental losses

Answer 1

Other than collision coverage in automobile insurance covers losses from incidents that do not involve a collision, such as theft or natural disasters, after the policyholder pays any applicable deductible.

Step-by-step explanation:

In automobile insurance, other than collision coverage, also known as comprehensive coverage, refers to insurance that covers any direct or accidental loss of, or damage to, the insured's automobile not caused by a collision. This includes events such as fire, theft, vandalism, and natural disasters like floods or hail. It is important to note that this type of coverage is distinct from liability coverage, which consists of bodily injury liability and property damage liability, as well as collision coverage, which specifically addresses damage from accidents involving another vehicle or object.

To illustrate, if your car was damaged by a falling tree limb during a storm, the repairs would be covered by other than collision coverage, after any applicable deductible is paid. Deductibles are designed to reduce moral hazard by having policyholders share in the cost, ensuring they do not act recklessly knowing that their policy will cover all losses.