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rental cars that require loss of use coverage to use through insurance

Do I Need to Increase My OPCF 20: Loss of Use Coverage?

The cost of living is rising and we are feeling the effects in many different facets; groceries, gas, entertainment. The increased costs are also finding their way into the insurance world. The cost and time it takes to repair a vehicle are at an all time high. In large part because the replacement parts can be difficult to source and the work force is still recovering from the pandemic. Couple that with the increased cost to rent a vehicle and we have a problem. One area where clients are now getting burned is with their rental car coverage. In order to receive rental coverage you need to pay for the OPCF 20 or more commonly referred to as Loss of Use coverage on your auto policy.

Have you ever used the OPCF 20: Loss of Use Coverage on your auto policy? Do you know what the OPCF 20 coverage is? And why would you need to increase the amount of coverage that you have so you don’t get burned? We want to make sure you are covered in the event you need to use you Loss of Use coverage on your auto insurance policy. But first, we need to start from the beginning.

What is OPCF 20: Loss of Use Coverage?

The OPCF 20 or Loss of Use coverage is used to cover the cost of a rental vehicle or some other mode of transportation (such as public transit, or taxi services) while your vehicle is being replaced or repaired. The vehicle needs to be damaged from an insured peril in order for this coverage to be used. If for instance your vehicle needed new brakes from regular wear and tear you would not be able to use the OPCF 20 coverage. The vehicle needs to be damaged in an insured claim. If this is the case your insurance company can arrange for you to be placed in a rental vehicle.

The amount of coverage differs from carrier to carrier. Most carriers offer a dollar amount. For example you would have purchased a limit of $1500 for the loss of use coverage on your auto policy. If you use the coverage you can use up to a maximum of $1500 for a rental vehicle while your vehicle is being repaired. Other carriers offer a fixed amount of time. For example you have up to 30 days available to use a rental vehicle while your vehicle is being repaired.

Do You Need to Increase Your OPCF 20 Coverage?

Having a thorough understanding of auto insurance in Ontario is crucial. The cost of vehicles is increasing. As a result, the cost to repair the vehicles is also increasing. But that’s not all, the amount of time it is taking to repair vehicles is also drastically increasing. This is in large part due to difficulty to source proper parts for vehicles that require repairs. You couple that with a diminished work force and you have a recipe for clients getting burned on their rental car coverage.

First off, you need to check your policy to see if you have OPCF 20: Loss of Use coverage. If you do you need to find the value or time frame associated to the coverage. For most companies the base amount they offer is $1000 – $1500 for the OPCF 20 coverage. The average cost to rent a vehicle in 2023 is around $150/day. Obviously the type of vehicle you rent will fluctuate this amount. This would mean the maximum amount of days you would be able to use a rental car are 10 days while your vehicle is being repaired. In years past this was likely an adequate amount as your vehicle was likely being repaired within a week or two maximum. In 2023 many companies are taking months to get cars repaired. All of a sudden that $1500 is not nearly adequate enough.

How Do I Update My Loss of Use Coverage?

Ok, so we have covered that your current OPCF limit might not be adequate enough. How do we increase it and what limit should you increase it to? With endorsements on your auto policy you are typically charged a premium to add them to your coverage. OPCF 20 is no exception, you will need to purchase the coverage in order to have it on your policy. Most companies allow you to purchase an increased amount. For instance you can purchase an increase in your limit from $1500 to $3000 for rental coverage. The price increase is typically and additional $30 – $50 dollars for the year.

Based on what we are seeing in the industry, with wait times and the length of repairs we are strongly recommending our clients increase their OPCF 20 limit to $3000. To update the loss of use on your limit please contact your account manager or submit a request to update your auto insurance. You can do so by going to our self serve link and selecting change vehicle coverage from the drop down.



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