OPCF 5 Endorsement- Permission to Rent or Lease Automobiles 

OPCF 5 Permission to rent or lease

The OPCF 5 is a common auto insurance endorsement designed to provide coverage for leased vehicles. It overrides the standard exclusion in the Ontario Automobile Policy (OAP1) that typically prohibits coverage when a vehicle is leased to someone else. Since a leased vehicle is registered in the lessor’s name, the lessor requires the lessee to add the OPCF 5 endorsement to the policy. This addition reinstates coverage, ensuring the vehicle remains protected.

When you lease a vehicle, the lessor will require confirmation that the OPCF 5 endorsement has been added to the auto policy before the vehicle is handed over. This endorsement protects the lessor by granting permission to lease the vehicle to the lessee, ensuring the auto policy remains compliant and safeguarding the lessor’s financial interest.

How does the OPCF 5 endorsement work?

The OPCF 5 endorsement protects the lessor by allowing the leased vehicle to maintain full insurance coverage despite being rented or leased out. 

Here’s how it works:

  1. Overrides Standard Exclusion:  The standard Ontario Automobile Policy (OAP1) excludes coverage when a vehicle is leased or rented to another person. OPCF 5 overrides this exclusion, ensuring the vehicle remains insured.
  1. Ensures Financial Protection: By maintaining full coverage, the lessor is protected from financial losses that could occur if the leased vehicle is damaged, stolen, or involved in an accident.
  1. Liability Coverage: The endorsement ensures that liability coverage is in place, protecting the lessor from potential legal and financial liabilities arising from the lessee’s use of the vehicle.
  1. Asset Protection: As the vehicle remains insured, the lessor’s asset (the vehicle) is protected, preserving its value and ensuring any necessary repairs or replacements are covered by the insurance policy.

OPCF 5 Meaning and Explanation

Leasing or renting your vehicle is excluded under the standard Ontario Automobile Policy (OAP1). The OPCF 5 endorsement modifies the policy language to include the lessee in the definition of “owner.” In the standard OAP1, leasing or renting is excluded under section 1.8.3. By adding the OPCF 5 endorsement, you ensure that the vehicle remains protected despite being leased or rented.

Difference between OPCF 23 and OPCF 5?

The difference between OPCF 23 and OPCF 5 lies in the purpose of each endorsement. 

The OPCF 23 protects the lender’s financial interest in the vehicle, ensuring that insurance payouts are directed to the lienholder and policyholder.  

Key Takeaways from OPCF 23

  • Protects the lender’s financial interest in the vehicle.
  • Ensures insurance payouts first satisfy any outstanding loan or mortgage on the vehicle.
  • Provides added security for lenders when financing vehicle purchases
  • Applies to financed vehicles only

The OPCF 5 allows the vehicle owner (lessor) to lease or rent their vehicle to another person while maintaining full insurance coverage, overriding the standard exclusion in the Ontario Automobile Policy.

Key Takeaways from OPCF 5

  • Overrides the standard exclusion that voids coverage if the vehicle is leased or rented out.
  • Reinstates full insurance coverage for vehicles that are leased or rented.
  • Ensures that the vehicle owner is protected from financial loss even when the vehicle is used by someone else.
  • Applies to leased vehicles only

OPCF 5 Requirments 

To add the OPCF 5 endorsement to an Ontario Automobile Policy (OAP1), the following requirements must typically be met:

  1. A lease agreement is required between the lessor (owner) and the lessee (driver). This agreement outlines the terms and conditions of the lease, including duration, payment, and maintenance responsibilities.
  1. The vehicle must be owned and registered by the lessor. The lessor is usually a leasing company or financial institution that retains ownership while the vehicle is leased to the lessee.
  1. The base insurance policy (OAP1) must be active and in good standing. OPCF 5 is an add-on endorsement, so it cannot be applied independently of an existing policy.
  1. The lessor and lessee must comply with all relevant legal and regulatory requirements related to vehicle leasing and insurance in Ontario.
  1. The lessee may be required to provide proof of insurance coverage to the lessor. This ensures that both parties are aware of the insurance status and coverage details.

By meeting these requirements, the lessor can successfully add the OPCF 5 endorsement to their insurance policy, ensuring that the leased vehicle remains fully covered.

Peter Martire, CIP, CRM, RIBO – Executive Editor and Insurance Advisor

Peter has been working in the insurance industry since 2005. He has over 18 years of experience adjudicating complex auto insurance claims and sales and service brokering. In March of 2024, he partnered with Begin Insurance Inc. as a Senior Insurance Advisor. He also serves as Executive Editor of carinsuranceinontario .ca.

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