Waiver of depreciation is an optional add-on for car insurance policies. When you drive a new vehicle off the lot, you probably don’t want to think about worst-case scenarios like theft or a serious accident. However, preparing for these possibilities is crucial, and that’s where the Waiver of Depreciation (Endorsement OPCF 43) comes in. At Roughley Insurance Brokers, we’re committed to helping you understand how this coverage works and why partnering with a broker is essential to securing the right protection for your needs.

What is OPCF 43?

OPCF 43 is an optional endorsement available in Ontario that removes depreciation from the value of your vehicle if it’s stolen or deemed a total loss after an accident. Vehicles depreciate rapidly the moment they leave the lot, and without OPCF 43, the settlement you receive for a total loss is based on that depreciated value—leaving you significantly out of pocket. Great coverage for the unexpected.

With OPCF 43, the insurance company waives depreciation and compensates you based on the original purchase price, the manufacturer’s suggested retail price (MSRP), or the cost of a replacement vehicle of the same make and model. This means you can replace your vehicle with a new one of similar quality without worrying about losing value due to depreciation.

If you’ve leased a vehicle, OPCF 43A functions similarly, providing this valuable protection for leased cars.

Why OPCF 43 Matters for You

If you’ve just purchased a brand-new car, you’ve made a significant financial investment. Without OPCF 43, if your vehicle is totaled within the first few years of ownership, you would only receive the depreciated cash value—potentially thousands less than what you paid. With OPCF 43, you’re protected from this financial loss, ensuring that you receive compensation based on the original purchase price.

For example, if you purchased a new car for $40,000 and it’s stolen after a year, without OPCF 43, your insurer might compensate you only $30,000 due to depreciation. With OPCF 43, you’d receive the original $40,000, allowing you to replace the vehicle without financial hardship.

This endorsement is particularly important for high-theft vehicles, as some insurers may charge higher premiums or surcharges unless specific anti-theft devices are installed. OPCF 43 helps mitigate financial loss in these situations and provides peace of mind.

Actual Cash Value vs. Replacement Cost

Understanding the difference between Actual Cash Value (ACV) and Replacement Cost is important when considering insurance coverage. ACV reflects the current market value of your vehicle, taking into account depreciation, while Replacement Cost (like OPCF 43) ensures you receive enough to replace your vehicle with a new one of similar make and model without accounting for depreciation.

Policyholder Criteria

To qualify for OPCF 43, policyholders generally need to:

• Be the first owner of the vehicle
• Purchase the coverage when the car is new
• Maintain full insurance coverage on the vehicle
• Meet specific eligibility requirements, such as a clean driving record

Since the OPCF 43 endorsement is often added when the insurance policy starts, it’s important to discuss your options with your broker when purchasing a new car. Premiums for this coverage can vary based on factors like the vehicle’s value and your driving history.

Coverage Aspects and Limitations

Depreciation waivers cover the gap between your car’s depreciated value and its original purchase price in case of a total loss. The coverage typically lasts 24 to 36 months, with some insurers offering extensions up to 60 months for an additional fee.

However, waivers don’t cover everything. They often exclude:

• Wear and tear
• Mechanical failures
• Damage due to poor maintenance

Most waivers apply only to the first owner, and there’s usually a cap on the maximum payout. Additionally, high-performance cars, luxury vehicles, and commercial-use vehicles may not be eligible. It’s also worth noting that depreciation waivers generally only cover total loss scenarios, not partial damages.

Optional Coverages to Consider

In addition to the Waiver of Depreciation, other optional coverages can provide added protection for your new vehicle:

Collision and Comprehensive Coverage

These coverages protect against damages to your vehicle from accidents, theft, vandalism, or natural disasters. While these coverages are required for leased or financed vehicles, they are also prudent for fully owned vehicles to avoid major repair costs.

Rental Car Coverage

This coverage ensures you have access to a rental vehicle while your car is being repaired after an insured loss. It can help minimize disruption to your daily life.

Loss of Use Coverage

Provides reimbursement for transportation costs if your vehicle is damaged and you need alternative transportation.

Roadside Assistance

Offers services like towing, battery boosts, and tire changes, providing peace of mind in case of an emergency.

It’s important to discuss these options with your broker to determine what best suits your needs and budget.

Changes in the Industry: High Theft Vehicles and OPCF 43

Recently, there has been an alarming trend of insurers removing the availability of the OPCF 43 endorsement for vehicles that are on their high-theft auto list, unless specific anti-theft measures are installed. This list of high-theft vehicles is constantly changing, and the requirements often come at the owner’s expense. In some cases, installing these devices can even void the vehicle’s warranty. For those who can’t meet these requirements, losing the coverage means that, in the event of theft, they may only receive the depreciated value of their vehicle—putting them in a difficult financial position through no fault of their own.

At Roughley Insurance Brokers, we understand the frustration this causes, and we work proactively to find solutions for our clients. We partner with insurance providers like Optiom to offer additional protection options that can fill this gap—providing better coverage, even for high-theft vehicles, than the standard OPCF 43 endorsement. For more information, give us a call today.

The Importance of Talking to Your Broker

Navigating insurance options like OPCF 43 can be overwhelming, but you don’t have to do it alone. At Roughley Insurance Brokers, we work with multiple insurance carriers to find the best coverage at the right price for you. Unlike direct insurance agents, we act in your best interest—ensuring you understand all your options, including endorsements like OPCF 43, and get the protection you need without paying more than necessary.

It’s also important to know that not all insurers offer the same terms for OPCF 43. At Roughley Insurance Brokers, we help you compare different policies and understand which options provide the best value. This includes helping you avoid potential surcharges for high-theft vehicles by advising on accepted anti-theft devices.

Contact Roughley Insurance Brokers

Whether you’re buying a new car or want to review your current coverage, Roughley Insurance Brokers can help you decide if a Waiver of Depreciation endorsement makes sense for you. Contact us today to explore your options and make sure your investment is properly protected. As a family-owned brokerage, we prioritize your best interests and work tirelessly to provide the right coverage for your needs.