Blog OPCF 49 Explained

Dec 5, 2023

Agreement Not to Recover for Loss or Damage from a Collision

red car damaged from collision

As of January 1, 2024, drivers can opt out of Direct Compensation-Property Damage (DCPD) with OPCF 49. This is the newest endorsement you can add to your policy. Why would you consider adding it?

Drivers are always looking for ways to lower their Ontario car insurance. This new OPCF is one of the many ways the government seeks to give consumers more choices. However, OPCF 49 has pros and cons you should understand before removing DCPD from your policy.

Below, you’ll learn what OPCF 49 is, how it works, what it includes, and if it will lower your rate.

3 key takeaways of OPCF 49

  • DCPD covers damage to a vehicle when the policyholder is not at fault.
  • Starting in 2024, drivers in Ontario will be given the choice to opt out of DCPD coverage.
  • Declining DCPD can lower insurance premiums, but it also removes important coverage.
What is OPCF 49?
OPCF 49 example
What does OPCF 49 include?
Will OPCF 49 lower my insurance rate?
Reasons to choose OPCF 49
Potential cons of using OPCF 49

What is OPCF 49?

OPCF 49 Agreement Not to Recover for Loss or Damage from an Automobile Collision allows drivers to opt out of the direct compensation property damage portion of mandatory car insurance in Ontario.

Ontario Policy Change Forms (OPCFs) give drivers more options to alter their policy to add, reduce, or change existing limits. Before introducing OPCF 49, DCPD was mandatory for all drivers. You did not have an option to remove it from coverage. Now you do.

If you add OPCF 49, you give your insurer permission not to compensate you for any physical damage to your car if it’s involved in an accident.

Keep in mind that DCPD will still be included in mandatory coverage when you get a car insurance quote. You need to add OPCF 49 to remove it and qualify for a lower premium. Speak with our team to see if this endorsement makes sense for you.

OPCF 49 example

Here is an example of how OPCF 49 works:

You recently got a car insurance quote. During the quote process, you spoke with your insurer and decided to add OPCF 49 and remove DCPD from your policy. This reduces your annual premium.

Fast forward a few months. You are driving home from work one day, and another vehicle hits your car from behind. There is extensive damage to the rear end of your vehicle. You’ll need a replacement vehicle to drive while the repairs are done.

Since you removed DCPD, and even though you are not at fault for the collision, your coverage does not cover the cost of repairs or provide assistance with the loss. This means you will have to arrange for the repairs and a rental vehicle on your own, which can be time-consuming and expensive.

Unfortunately, you also cannot claim reimbursement from the driver or owner of the vehicle that hit your car or their insurer. In adding DCPD 49, you took on the financial responsibility.

graphic explaining how OPCF 49 works in car insurance

What does OPCF 49 include?

As stated in the example above, if you are in an accident, you won’t be able to receive compensation from your insurer or the other party’s provider.

Here is a snippet of the OPCF 49 form on the FSRAO website:

“WARNING - By signing this form, you agree you cannot claim Direct Compensation Property Damage and Collision or Upset Coverage:

If the described vehicle is damaged in a collision, the loss will not be compensated even if you are not at fault. You will not be compensated by this insurance policy, or by anyone else, including anyone at fault for causing the damage, or their insurance company.

Not being compensated means you will not be reimbursed for any loss or damage to the described automobile including:

  • repair costs;
  • the value of the vehicle;
  • the loss of use of the vehicle;
  • a replacement for the vehicle; or
  • loss or damage to any of the vehicle’s contents.

If you lease or finance the vehicle, you should not sign this form without consulting with the lease or financing company because you may be personally responsible for its loss or damage.”

Opting in for OPCF 49 is not a decision to be taken lightly – you may receive a lower rate but then risk taking on the financial responsibility of repairing or replacing your vehicle if you are in an accident.

Will OPCF 49 lower my insurance rate?

You may lower your premium by 5-10%, but it’s crucial to be honest about your expenses for covering repairs or replacements from an accident.

If you drive an older vehicle worth less than the cost to insure it, you may benefit from OPCF 49. Depending on your income, you may not be able to cover those costs, and removing DCPD could do more harm than good for your policy and bank account. This is why speaking with a team of policy experts is vital during your decision-making process.

Explore your policy options with OPCF 49

All drivers have unique needs for their insurance. Adding other endorsements and additional types of coverage may be right for you, and it may not. Our team will help you find the best coverage for your vehicle.

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Reasons to choose OPCF 49

OPCF 49 offers drivers more coverage flexibility and can help keep rates low. FSRA worked with Ontario's property and casualty industry to create a way for consumers to opt out of coverage. You may want to sign the OPCF 49 if:

  • Reduce premiums: You can save 5-10% of your annual premium if you opt out of this coverage. Actual savings could be higher, but it will depend on the specific situation.
  • You drive an older vehicle: This endorsement makes sense if you drive an older low-value vehicle. For example, a vehicle that you would not replace if it were damaged in a collision.
  • You can afford the financial impact of an accident: Drivers who won't be financially impacted by vehicle damage or can pay for repairs out-of-pocket may be comfortable with OPCF 49.

Potential cons of using OPCF 49

This policy endorsement gives you more choices but also puts more financial responsibility on you if there's an accident. Your insurance won't cover the loss even if you're not at fault. Consider these cons before choosing OPCF 49:

  • Paying out of pocket: You are responsible for arranging and paying for your own repairs and rental vehicle.
  • Lengthy repair times: Car repairs take longer due to supply chain issues and chip shortages. Loss-of-use coverage (OPCF 20) is an optional add-on for most policies, allowing drivers to be responsible for their car rental fees while their car is being fixed.
  • Expensive rental fees: In August, CBC reported that, on average, a rental vehicle costs over $2,000 a month, and short-term options could cost up to $120 per day.
  • Risk of being underinsured: When you don’t have enough coverage, you become underinsured. Choosing OPCF 49 to save on premiums could backfire if there is an accident.
  • Denied claims: You will likely see your car insurance claim rejected if your policy doesn’t meet your needs or peril limits.

Our team can help you add OPCF 49

Are you thinking about removing DCPD from your policy? Please speak with our agents to learn more about the pros and cons of adding OPCF 49. We’ll help you explore scenarios based on your vehicle and coverage needs. We’ll also help you look for other car insurance discounts to lower your premium.

A final word about OPCF 49

Starting January 2024, DCPD won't be mandatory for Ontario drivers. They can opt out and waive their right to claim damages from their insurer in case of a non-fault collision. OPCF 49 enables drivers to agree not to receive compensation for non-fault damages. In exchange, you’ll receive a reduced rate. These changes also expand usage-based insurance access.