Logic & Language and Forms & Facts: ‘Oh Deer, These Insurance Myths!’

I’m not sure when I first wrote about this month’s coverage issue, though I’m sure it was at least 13 years ago and probably earlier. This is the time of year when auto collisions with deer begin to peak in many states. The issue is whether auto insurance covers damage to the vehicle caused by collisions with deer or other animals.

Unfortunately, if you read much of what has been written in the media and what has been posted on state insurance department and some industry websites, you will be misinformed. For example, from the National Association of Insurance Commissioners’ website: “Damage to a vehicle from a collision with an animal is covered under an auto policy’s optional comprehensive coverage. If you only have collision coverage or liability coverage, your insurance carrier will not cover damage to your vehicle resulting from a collision with an animal.” This statement appears verbatim on a number of state insurance department websites.

Some state insurance departments have their own verbiage or quotations such as this press release, “‘Some consumers don’t realize that Collision insurance does not cover damages when a car hits a deer,’ said Susan Voss, Iowa’s Insurance Commissioner.” This blanket statement is not accurate. Then, there’s this attribution from USA Today: “Many people are not aware that the collision coverage under an automobile insurance policy does not cover you if you hit a deer,” says Wisconsin Commissioner of Insurance Jorge Gomez.

So where do regulatory authorities get this information? Largely from the insurance industry, including organizations such as the Insurance Institute for Highway Safety and the Insurance Information Institute. In the case of the latter organization, this statement was included in a recent article about damage caused by a catfish collision: “Animal damage is covered if you have optional comprehensive coverage. If you only have collision coverage, then you’re not covered.” As a general statement, that is not true, and I wonder how many consumers never bothered to turn in a claim because of it and similar statements.

You will also find misinformation on insurance company and consumer insurance websites. In fairness, in more than 50 years in the industry, I’ve seen two auto policies that unambiguously covered deer collisions only under comprehensive coverage, not collision coverage. Both of these policies had language something like, “However, loss caused by the following are not considered ‘collision,'” followed by a list of perils like hitting an animal. While I’m sure there are likely more than two examples, all of the other policies I’ve personally reviewed, including the ISO standard Personal Auto Policy (PAP) and especially the ISO standard Business Auto Policy (BAP) do not say this. So, let’s take a look at the ISO forms.

Both the ISO BAP and PAP provide physical damage options in the form of collision and “comprehensive” coverage, but the BAP also allows an option for comprehensive coverage in the form of Specified Causes of Loss. The BAP says, “If you carry Comprehensive Coverage for the damaged covered ‘auto,’ we will pay for the following under Comprehensive Coverage…’loss’ caused by hitting a bird or animal….”

Note that it says “IF” you have comprehensive coverage, hitting a bird or animal is covered. However, if you DON’T have comprehensive coverage – for example, if you chose Specified Causes of Loss – that doesn’t mean you don’t have coverage for hitting an animal. It means that such a loss is a collision claim and possibly subject to a larger deductible and perhaps a premium surcharge at renewal if permitted by law.

The point is, a collision with a deer IS a “collision.” The word “collision” is not defined in the ISO forms, so we look to common usage in the form of a dictionary definition: “…an instance of one moving object or person striking violently against another.” Sounds like hitting a deer, no?

The ISO policies cover collision with an undefined “object.” So, what is an “object”? Most dictionaries define an “object” to mean “…something material that may be perceived by the senses.” That would include most forms of matter from deer to telephone poles. No one would argue that hitting a telephone pole is not a collision, so why wouldn’t striking a deer also be a collision? The former is an inanimate object, and the latter is an animate object, but both are “objects” and both ISO policies cover collisions with objects.

What the ISO BAP effectively says is that IF you pay extra for comprehensive coverage, often with a lower deductible and nonchargeable rate structure, we’ll cover collisions with animals as comprehensive claims, not collision claims. But nothing in the ISO BAP says if you don’t have comprehensive coverage, you don’t have coverage for hitting a deer. You do. It’s called collision coverage.

Given that most deer collisions, unlike most telephone pole collisions, are largely unavoidable and don’t usually involve driver negligence, does it make any sense that a collision with a stationary telephone pole due to driver distraction IS covered, but striking a moving deer is NOT covered? Of course not, yet that is the great myth of deer collisions perpetuated throughout the industry and to consumers.

While the current ISO PAP does not include the clarifying “IF you carry Comprehensive Coverage” language, I believe the same arguments I just made apply to that form as well.

In the case of personal auto policies, it is likely unusual for a policy to cover collision and not comprehensive. But, if that’s the case, I see no convincing argument that there is no coverage for colliding with an animate object.

Bad insurance information is pervasive on consumer websites. For example, to diverge for the moment, one recent Fourth of July article said that homeowners insurance doesn’t cover fireworks damage because they are illegal in most cities. I’ve not seen that exclusion in most (i.e., any) homeowners policies I’ve reviewed.

When President Obama was inaugurated, the demand for hotel rooms far exceeded supply, so some people were renting their homes. A consumer article, citing an industry article, said there would be no coverage under homeowners policies. However, ISO forms permit occasional rentals of entire homes and regular rental of parts of homes with certain restrictions and limitations.

Consumer media will likely continue to misinform readers about insurance issues, but we don’t have to help them. We can do better. Industry press releases, articles and advertisements that address policy coverage issues should be vetted by coverage experts, not media and PR departments.