What Is Other Than Collision (OTC) Coverage?

Last Updated on November 12, 2022

When shopping for car insurance, you may encounter the term ‘other than collision’ coverage.

Also known as OTC coverage or comprehensive coverage, other than collision coverage covers damages that occur outside of accidents. It covers hailstorm damage, collisions with animals, theft, vandalism, and other damages, for example.

What is other than collision (OTC) coverage? Is comprehensive coverage worth it? Today, we’re answering all your questions about other than collision coverage and how it works.

What Is Other Than Collision Coverage?

Other than collision coverage is a type of optional car insurance that protects your vehicle from certain damages that occur outside of accidents with other vehicles.

Other than collision coverage is most commonly known as comprehensive coverage, and most insurers refer to it as comprehensive coverage. However, some insurers and some states prefer to use the term other than collision coverage instead.

What Is Collision Coverage?

To understand how other than collision coverage works, it helps to understand how collision coverage works.

Collision coverage is an optional car insurance policy that covers the cost of repairing or replacing your own vehicle after an at-fault accident.

If you rear-end someone, for example, and have damage to your front bumper, then you might make a claim through your collision coverage. You collided with another vehicle, and you can make a claim for your car insurance company to cover this damage.

Collision coverage does not, however, cover damage that occurs outside of collisions with other vehicles. That’s where other than collision coverage comes in.

What Does Other Than Collision Coverage Cover?

Other than collision coverage covers damages to your vehicle that occur outside of accidents with other vehicles, including:

• Theft
• Vandalism
• Fire
• Natural disasters (including hurricanes, tornadoes, hailstorms, and floods)
• Falling objects (like tree branches)
• Damage done to your car by animals

What Does Other Than Collision Coverage Not Cover?

Other than collision coverage does not cover the following types of damage:

• Damage to your car from a collision
• Damage you cause to someone else’s vehicle from a collision
• Medical expenses for you and your passengers after an accident

How Does an Other Than Collision Coverage Claim Work?

When you make a claim through your other than collision coverage, you pay a deductible before your insurance covers the rest of the claim.

Here’s how it works:

• You experience a loss, like hailstorm damage, a fallen tree branch, or theft of your vehicle.
• You contact your insurer to make a claim.
• You pay a deductible (typically $250 to $500), and your insurer covers the cost of repairing or replacing your vehicle based on its pre-loss condition.

When buying other than collision coverage through your insurer, you set the deductible however you like. Some drivers choose a $250 deductible to lower the cost of an accident, for example. Others choose a $1,000 deductible to lower their monthly insurance premiums. Depending on your needs, budget, and risk tolerance, you may want to set a higher or lower deductible.

All other than collision coverage policies have a limit, which is typically the actual cash value of your vehicle. In a total loss insurance claim, insurers will cover you up to the actual cash value of your vehicle. If your vehicle is stolen and never recovered, for example, then your insurer will reimburse you based on the actual cash value of your vehicle.

Is Other Than Collision Coverage Optional?

If you are leasing or financing your vehicle, then other than collision coverage is not optional. Lenders require this coverage to protect the collateral of the loan.

If you fully own the vehicle, then other than collision coverage is optional, and you can choose whether or not to carry it.

While most states require liability insurance (including bodily injury and property damage liability coverage), no state requires collision coverage or other than collision coverage. Both coverages are optional in every state.

How Much Does Other Than Collision Coverage Cost?

Other than collision coverage can add hundreds of dollars per year to a typical insurance policy.

Minimum liability insurance policies are priced at around $400 to $800 per year, depending on your state and coverage options.

To add collision and other than collision coverage to your policy, however, you can expect to spend around $1,450 per year in total. This is called full coverage car insurance.

Compare full coverage car insurance rates in your area to ensure you’re paying the best possible rates for other than collision coverage in your area.

Should I Buy Other Than Collision Coverage?

Other than collision coverage may be required on new vehicles. If you are leasing or financing your vehicle, for example, then you need to carry other than collision coverage.

If you fully own your vehicle, however, then you can choose whether or not to buy other than collision coverage.

Without other than collision coverage, you must pay out of pocket for vehicle repairs. If your vehicle is stolen and not recovered, for example, then you cannot make an insurance claim. You must pay for a new vehicle out of pocket. Similarly, your insurance will not cover collisions with animals, fallen tree branches, vandalism, hailstorm damage, fire damage, and other damages.

If you have an older vehicle that isn’t worth much money, then you may be able to safely drop other than collision coverage. On older vehicles, the cost of repairs can quickly exceed the value of your vehicle, which means even a minor accident can become a total loss insurance claim.

Depending on your personal risk tolerance, budget, and vehicle value, other than collision coverage may or may not be the right choice for you.

Final Word on Other Than Collision Coverage

Other than collision coverage covers damages to your vehicle that occur outside of collisions with other vehicles. It can cover damage caused by animals, for example, along with fire damage, flood damage, theft, vandalism, fallen tree branches, and other unexpected events.

To determine if other than collision coverage is worth it, shop around for quotes in your area to see how affordable other than collision coverage can be.