OPCF 43 - Waiver Of Depreciation And Replacement Value Car Insurance Explained

OPCF 43 (Ontario Policy Change Form 43) is a coverage enhancement that can be added to your car insurance policy. It removes your insurance company’s right to deduct depreciation from the value of your vehicle for a loss or theft claim.

OPCF 43 Explained

The FSCO provides an explanation of OPCF 43:

“This coverage removes the insurer's right to deduct depreciation from the value of your vehicle when settling a claim for loss or damage caused by a peril for which you are insured.”

Other Information About OPCF 43

• With this endorsement, your insurer will pay the lowest of the actual purchase price, manufacturer’s suggested retail price at the time of purchase, the cost of replacing your car with a new car of the same make or model.
• You must be the original owner of the vehicle
• Tires, batteries, replacing parts for precious unrepaired damage are not included
• The loss/damage must occur before the policy expiry date

OPCF 43 and 43A are very similar. The main difference is OPCF 43A is for lessees. The same provisions apply to both policy enhancements.

For an extended list of OPCF endorsements, check out OPCF – Explaining Ontario Policy Change Form Information.

A depreciation waiver in car insurance is common for drivers who purchase or lease a brand new vehicle. It means your insurance company will waive the ability to deduct depreciation and provide you with a cheque for the value of a new vehicle after a total loss claim. Some conditions may apply.

Waiver of depreciation coverage can be added to any policy at the time of purchase or lease of a new vehicle.

A limited waiver of depreciation endorsement ensures your insurance company will not deduct depreciation from a total loss claim for a specified period of time. In most cases, a limited waiver of depreciation lasts 24 months from your purchase or lease date.

Replacement cost insurance ensures your vehicle is replaced after a covered total loss claim. The coverage is applicable to new vehicles and you must be the original owner. You will be paid out enough money to replace your vehicle with a new similar product of the same quality and features. The amount paid will be based on current market value.

Replacement cost insurance is not required. However, adding replacement cost to your policy will ensure you will receive the same, or very similar, vehicle.

If your vehicle is stolen or considered a total loss, you will receive the same or similar vehicle you were driving at the time of the claim. Replacement cost insurance does expire. It is based on the original delivery date of your vehicle.

If you drive a new vehicle, you know that it loses value the moment you drive it off the lot. If you were to get into an accident within the first few months of owning the vehicle, you would only receive the depreciated value of the vehicle without replacement cost insurance. This alone makes the coverage worth adding to your policy.

If your vehicle is not replaced after a total loss or theft claim, you will be paid the replacement value of the vehicle. Replacement value is the amount of money you will be paid by your insurance company. Replacement value coverage tends to have a higher insurance premium.

Replacement value is the actual amount of money it costs to replace your vehicle without depreciation. Actually cash value is the current cost to repair or replace your vehicle minus depreciation. If you have actual cash value, you will be provided with the value of your vehicle in its current used condition, not the amount it would cost to replace your damaged car with a new car.