OPCF 20 Coverage for Transportation Replacement – Loss of Use

OPCF 20 - loss of use coverage Ontario

What is the purpose of the OPCF 20, loss of use endorsement?

The purpose of the OPCF 20 Loss of Use Endorsement is to provide alternate transportation coverage when your vehicle becomes undrivable due to an insured peril covered under your policy.  The endorsement will pay for reasonable expenses for renting a similar substitute automobile, which includes reimbursement for taxis, Uber, or public transportation. 

How much does OPCF 20 cost?

The cost of the OPCF 20 endorsement varies by insurer, generally ranging from $10 to $100 per year for an average coverage limit of $1,500. Premiums increase as the coverage limit goes up. Higher limits of $2,000 or more are recommended due to supply chain delays and back-ordered car parts, which can prolong repair times and premature termination of coverage. 

What does OPCF 20, Loss of Use coverage mean?

OPCF 20 stands for Ontario Policy Change Form # 20—Coverage for transportation replacement. It’s an endorsement or floater meant to add “loss of use” coverage to your Ontario standard automobile policy. The coverage is optional and must be purchased as an add-on. 

Loss of Use simply means you can’t drive your vehicle because it’s inoperable due to damages sustained by an insured peril. (e.g. collision, theft, hail damage etc.)

How does the OPCF 20 endorsement work?

To qualify for the OPCF 20 endorsement, you must have optional loss coverages like All Perils, Collision, Specified Perils, or Comprehensive coverage. If you only carry Comprehensive or Specified Perils coverage without Collision, the OPCF 20 will apply only to losses covered under those perils. Conversely, if you only have Collision coverage, the OPCF 20 won’t respond to losses under Comprehensive or Specified Perils. 

The endorsement covers the loss of use of the vehicle, meaning it applies only when the listed vehicle is unfit to drive due to damage or safety concerns caused by an insured peril.

Simply carrying the OPCF 20 endorsement doesn’t mean you can immediately rent a vehicle or arrange alternative transportation after an accident. If the vehicle sustained minor damage and remains roadworthy, the coverage does not apply. In such cases, the loss of use coverage kicks in only after the vehicle has been dropped off at the auto body shop for repairs.

What is the coverage limit for the OPCF 20?

The coverage limit for the OPCF 20 varies depending on the amount of insurance purchased. It can range between $900 and over $5,000, but the average limit is approximately $1,500. 

When does OPCF 20 loss of use coverage end?

Loss of use coverage typically ends when:

  • Your vehicle is repaired and can be driven again.
  • Your insurance coverage limit for loss of use is reached.
  • A settlement is offered for a total loss of your vehicle.

After a total loss, most insurers give a few extra days with the rental vehicle or alternative transportation if it’s still within your coverage limit. 

Does the OPCF 20 only cover rental cars?

The OPCF 20 provides coverage for alternative transportation options, including rental vehicles, public transit like buses, and services such as Uber or taxis. The endorsement is not meant exclusively for rental vehicles. 

What limit should I choose for the OPCF 20 endorsement?

The OPCF 20 limit sets the maximum amount your insurance company will pay for the loss of use of your insured vehicle. Selecting the right limit can be challenging, as the time required to settle each auto claim varies. In some cases, auto parts may be on backorder or unavailable, leading to delays in repairs. This can result in your coverage ending before your claim is fully resolved. Generally, opting for a higher limit offers better protection.

Does the OPCF 20 apply to trailers?

The OPCF 20 loss of use endorsement applies only to motorized vehicles. Trailers are not eligible for this endorsement. 

What type of car does the OPCF 20 entitle me to?

The OPCF 20 endorsement offers coverage for a replacement vehicle that is similar in kind and quality to the one listed on your auto insurance policy. For example, if your policy covers a 2024 Honda Civic, you would be entitled to a comparable vehicle such as a Toyota Corolla or Hyundai Elantra. Likewise, if your policy covers a 2024 Ferrari, the endorsement would provide for a comparable high-end, exotic vehicle.

How do you claim the OPCF 20 Endorsement?

The OPCF 20 endorsement doesn’t offer coverage on its own. You can only claim transportation replacement if your insured vehicle is damaged and cannot be safely driven. The coverage for transportation replacement must result from an insured peril, such as a collision or comprehensive peril.  

How soon will the OPCF 20 endorsement provide coverage?

OPCF 20 coverage begins when your claims adjuster deems your vehicle undrivable. However, it’s important to verify with your adjuster exactly when the coverage takes effect, as some brokers and agents may mistakenly believe it starts immediately, which is not the case. Keep in mind, that this endorsement is specifically designed to cover transportation replacement due to the loss of use of your insured vehicle, and it doesn’t automatically apply simply because you’ve filed a claim or been in an accident.

If your vehicle is repairable, OPCF 20 coverage begins once the car is dropped off at the body shop for repairs. If your adjuster instructs you to drive the vehicle for damage assessment, you’ll take the vehicle back after the assessment and continue driving it until it’s ready to be dropped off for the repair work.

Is Loss of Use coverage mandatory in Ontario?

Loss of use coverage is an optional add-on to your auto policy. It’s not mandatory, but it’s worth considering, especially since it’s affordable and provides valuable coverage.  

Does Comprehenisve or All-Perils offer Loss of Use coverage in Ontario?

Yes, comprehensive or all-perils coverage provides “loss of use” protection, but only if your vehicle is stolen. There is a mandatory 72-hour waiting period before coverage begins, unless you also have the OPCF 20 endorsement, which waives this waiting period. The coverage is limited to $900 per incident and ends once your vehicle is repaired or replaced or when the $900 limit is reached, whichever comes first. 

Does the OPCF 20 apply when I’m in a not-at-fault accident? 

The OPCF 20 endorsement does not apply to not-at-fault accidents that qualify for Direct Compensation Property Damage (DCPD) coverage. Since DCPD automatically includes loss of use coverage with no monetary limit, there is no need to activate the OPCF 20 endorsement when DCPD covers transportation replacement.

What does the OPCF 20 not cover?

The OPCF 20 does not cover the following:

  • Compensation for taxes on commercial auto claims
  • Coverage for a vehicle of not similar type, class, and quality
  • Rental car insurance or the Collision Damage Waiver offered by the rental vehicle agency
  • Any loss below your deductible

How does the OPCF 20 endorsement work with theft? 

With the OPCF 20 endorsement, loss of use coverage for a total theft begins at 12:01 a.m. the day after you report the theft to your insurance company or the police. However, in attempted theft where the vehicle is recovered without significant damage and remains drivable, coverage kicks in once the automobile is brought to an auto body shop for repairs. 

Does OPCF 20 cover downtime in Ontario?

The OPCF 20 endorsement does not provide coverage for downtime in Ontario. Loss of use coverage is only triggered by an insured peril, whereas downtime is regarded as a consequential loss from an accident and is not covered.  However, loss of use protection is provided by Direct Compensation Property Damage (DCPD) coverage.

Does OPCF 20 only cover rental cars?

The OPCF 20 covers any reasonable transportation replacement, including rental vehicles, taxis and public transportation.  

Summary

The OPCF 20 endorsement, also known as transportation replacement coverage, is an optional add-on to the Ontario Automobile Policy (OAP1) which covers alternative transportation costs when your insured vehicle is undrivable due to an insured loss. This endorsement is distinct from the OPCF 27, which addresses liability for non-owned vehicles, and it is designed specifically for situations where a vehicle is undergoing repairs or replacement.

To qualify, policyholders must have optional coverages like All Perils, Collision, Specified Perils, or Comprehensive. The OPCF 20 applies only when a vehicle is deemed undrivable and does not activate immediately after an accident. The endorsement covers rental vehicles, public transportation, and rideshare services up to a selected coverage limit, which typically ranges from $900 to $5,000.

Coverage under the OPCF 20 ends when repairs are complete, a settlement is reached, or the coverage limit is exhausted. It’s essential to choose a suitable limit, as repair delays or parts shortages can extend the claims process, potentially exceeding the policy limit. Additionally, the OPCF 20 does not cover trailers or provide rental car insurance, and it is not required in Ontario; it must be purchased separately.