Understanding Loss of Use Coverage
Buying car insurance is a lot like ordering a pizza. Some people like to order cheese and pepperoni, a.k.a "the basics", while others like to load up their pie with toppings.
How does this relate to car insurance? Well, people who like "the basics" are like drivers with mandatory coverage. In contrast, those who like an array of toppings are similar to drivers who purchase additional or optional types of car insurance.
In Canada, drivers can add several different types of optional coverage (often referred to as car insurance add ons or endorsements) to their policies, one of the lesser-known being loss of use coverage.
Whether you're not familiar with this unique add on, or simply need a refresher, be sure to continue reading.
START A QUOTEWhat is loss of use car coverage and why is it important for drivers?
Loss of use car coverage (also known as OPCF 20, QEF 20 or SEF 20 depending on your location) is an optional add on that covers your transportation expenses if your vehicle gets damaged in an accident or by a peril in which you're insured.
What does this mean?
Simply put, if your car gets damaged in an accident or by something out of your control, then your insurance company will pay for your temporary rental or public transportation expenses (depending on your level of coverage, we'll touch on this again shortly).
Most drivers feel that loss of use car coverage is important because it helps them deal with an additional expense that they would otherwise have to cover out of pocket.
So, if you were wondering "what is loss of use coverage and why is it important?", now you know the answer!
How do you get loss of use insurance for your vehicle?
As we mentioned earlier, loss of use car coverage is optional, so drivers don't automatically have this type of insurance.
Additionally, you are only eligible for this add on if you already have (or intend to purchase) one or more of the following types of coverage:
- Specified perils coverage
- Comprehensive car coverage
- Collision coverage
- All perils coverage
Specified perils coverage — Covers expenses related to specific risks, like fire, weather and theft, which are clearly stated in your policy.
Comprehensive car coverage — Covers expenses that aren't related to a vehicle collision. Comprehensive car coverage protects drivers from the same risks as specified perils coverage, along with a number of additional risks, like falling objects.
Collision coverage — Covers expenses related to at-fault collisions with third parties or inground objects, like signs and fire hydrants.
All perils coverage — Covers drivers from the same risks as comprehensive car coverage and collision coverage. All perils coverage is by far the best option for drivers that want to keep their vehicles (and wallets) safe.
Drivers should be aware that they don't need all of the types of coverage mentioned above to qualify for loss of use car coverage. But, having multiple types of car insurance can be beneficial, as it increases your chances of receiving compensation for the damage that occurs.
For instance, if you only have specified perils coverage and you accidentally collide with a fire hydrant, your auto insurance company will not pay for your temporary transportation expenses, even if you have loss of use insurance. Get in contact with a Surex insurance advisor to learn more about which option (or options) is right for you.
Save up to 25% on car insurance by teaming up with Surex
Not everyone has the time or energy to spend hours searching for and comparing car insurance quotes — life is busy enough as it is! Because of this, many drivers tend to go with one of the first options that they find.
If you're in a time crunch, our team at Surex can help you reshop your car insurance policy in a flash. With the click of a button, you can get in touch with your very own licensed insurance advisor, who can help you find and compare quotes from the most reputable car insurance companies in Canada.
We can provide you with up to ten quotes in ten minutes or less (the number of potential quotes varies from province to province), and in some cases, we can provide same-day insurance.
Visit us online or contact one of our licensed insurance advisors if you'd like to learn how we can help you save up to 25% by bundling your policies with one of our carriers.
What are some other add ons that drivers can include in their policy?
There are several different add ons that drivers can choose from in Canada; however, each province has its own nuanced rules regarding each of these endorsements. So, for simplicity, we'll briefly touch on some of the add ons that are available to drivers in Ontario.
*Contact a Surex insurance advisor if you'd like to learn about other car insurance add ons in other Canadian provinces*
Removing depreciation deduction (OPCF 43) — A type of add on that stops your car insurance provider from deducting the depreciation value of your vehicle during the claim process.
Family protection coverage (OPCF 44R) — Family protection coverage is a type of add on that protects you (and your family members) if you're involved in a car accident in which the at-fault driver has less third-party liability insurance than you.
Click here for an in-depth look at family protection coverage in Ontario.
Added coverage to offset tort deductibles (OPCF 48) — A type of coverage that lowers deductibles related to court-awarded compensation for pain and suffering. The costs are reduced by $10,000 for non-Family Law Act claims and $5,000 for Family Law Act claims.
Is loss of use coverage worth it for drivers in Canada?
As a final reminder, loss of use insurance is an optional type of coverage in Canada. This means you get to choose whether you want to purchase it or not.
In short, if you want to proactively protect yourself and avoid incurring temporary transportation expenses after an accident takes place, then loss of use car coverage is a fantastic option.
Do you want to learn more about this type of add on? Don't hesitate to reach out to a licensed Surex insurance advisor today!
