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What is Physical Damage?

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Kevely Diaz

Answered On Sep 20, 2023

· Answered On Sep 20, 2023

Physical Damage in insurance refers to the loss or harm to a tangible property or asset due to a covered peril. It is a broad term that encompasses any form of physical harm or destruction that can be inflicted on a property, including but not limited to damage from accidents, natural disasters, vandalism, or theft.

In auto insurance, physical damage coverage is divided into two types of coverage: collision and comprehensive. Collision coverage pays for damages to your vehicle resulting from a collision with another vehicle or object or from flipping over. Comprehensive coverage, on the other hand, pays for damages to your vehicle caused by events that are out of your control, such as theft, vandalism, natural disasters, falling objects, fire, storms, floods, and animals.

In property insurance, physical damage coverage helps to repair or replace the insured’s property if it is damaged, destroyed, or stolen. The extent of the coverage depends on the specifics of the policy, including any exclusions or limitations.

It’s important to note that physical damage insurance does not include intangible or indirect losses, such as loss of use, profits, or diminished value. These losses are typically covered under different parts of an insurance policy.