Buying a new car is exciting, but there’s one detail many drivers don’t think about until it’s too late: depreciation. The moment you drive your car off the lot, its value begins to drop. Suppose your brand-new vehicle is stolen or declared a total loss after an accident. In that case, your standard auto insurance policy will only pay its current market value—not what you originally paid. That makes sense for older cars, but how can you protect the value of your new car? The reality is that most of us will be involved in a motor vehicle accident at some point in our lifetime. In this article, we examine the OPCF 43 Waiver of Depreciation endorsement and how it offers unique protection for newer vehicles.
How Does an OPCF 43 Claim Work?
Typically, if you have to file a claim in relation to a motor vehicle accident, your insurance company will look up the current value of your vehicle. They will then deduct the depreciation value from the book value.
The value of the loss or damage is based on actual cash value (ACV) after taking into account depreciation. This means in the event of a claim, insurance pays the lower of the following:
- The cost to repair the loss or damage.
- The ACV of the automobile at the time of damage.
What is Vehicle Depreciation?
Car depreciation refers to the decrease in a car’s value over time. There are several reasons you should understand depreciation and how much the vehicle you’re buying is bound to depreciate. According to present rates of depreciation, up to 20% can be lost from the value of a new car within the first year of its purchase. However, barely 10% of its value is lost annually over the next four years of usage. This implies that as little as 40% of a car’s original purchase price is its worth after a period of five years.
What is the OPCF 43 & 43A?
OPCF stands for Ontario Policy Change Form. The OPCF 43, also called the Removing Depreciation Deduction endorsement, is an optional add-on to your auto insurance policy. In simple terms, it protects you from losing money because of depreciation. If your new car is stolen or written off, OPCF 43 ensures you get back the original purchase price or a brand-new replacement vehicle of the same make and model. Without this coverage, you could be left owing money on your car loan or lease if the insurance payout is less than what you originally paid.
The “Waiver of Depreciation” or an “OPCF 43” changes how the insurance company values your vehicle. When you add an OPCF 43 to your policy, your insurance company will not deduct the depreciation of the car for a specified period. The OPCF 43 usually applies for two to three years, depending on the insurance company. It is a coverage enhancement that you can add to your auto policy at the time of purchasing or leasing a new vehicle.
The Financial Services Commission of Ontario (FSCO) explains OPCF 43 like this:
“This coverage removes the insurer’s right to deduct depreciation from the value of your vehicle when settling a claim for loss or damage caused by a peril for which you are insured.”
Why It Matters
Depreciation happens fast— losing 10–20% of your vehicle’s value in the first year alone is shocking. If something unexpected happens, that gap between what you paid and what your insurance pays could be thousands of dollars. With OPCF 43, you don’t have to worry about that. Your investment is protected, giving you peace of mind during those first few years of ownership.
Two Types of Depreciation Waivers:
- OPCF 43 – Option to add to new vehicles (whether financed or not)
- OPCF 43A – Option to add to new lease vehicles
This coverage is available to all new vehicles, leased or financed. It removes the insurance company’s right to deduct the depreciation value from your new vehicle in the event of an insured loss.
FYI: It is important to note that your insurance company has the right to choose to repair or replace your vehicle.
What’s Covered (and Not Covered)
Covered:
- Total loss due to theft or a serious accident.
- Replacement with the same make and model, or reimbursement for the original purchase price.
Not Covered:
- Normal wear and tear.
- Partial damages (repairs are handled through your regular coverage).
- Aftermarket add-ons (like custom rims or stereo systems) unless they’re declared in your policy.
Cost vs. Value
The OPCF 43 endorsement usually comes at a modest additional premium, especially compared to the financial protection it offers. For many drivers, it’s a small price to pay for the peace of mind of knowing your new car won’t leave you underwater financially if it’s written off.
Other conditions include:
- You must be the original owner of the vehicle
- Tires, batteries, and replacing parts for previous unrepaired damage are not included
- The loss/damage must occur before the policy expiry date
The OPCF 43/43a does not cover the depreciation of a repaired new vehicle. Suppose your vehicle is involved in an accident and your insurance company repairs it. In that case, no coverage is available for the depreciation due to the vehicle’s involvement in an accident. This may affect resale or trade-in values.
Key Things to Remember
- Eligibility:
- Usually applies to new vehicles only (often 2–4 years old, depending on insurer).
- Must be the original owner (bought new, not used).
- Coverage Length:
- Varies by insurer (often up to 2–4 years from purchase date).
- What It Covers:
- Total loss from theft or accident.
- Replacement cost or original purchase price reimbursement.
- What It Doesn’t Cover:
- Normal wear and tear.
- Partial damages (like fender benders) — those are repaired, not replaced.
- Add-ons not declared in the policy (e.g., aftermarket rims unless listed).
- Cost:
- Premium varies, but it is often a relatively small add-on compared to the financial protection it gives.
Are There Rules to Get An OPCF 43?
Yes, every company has its own rules as to what requirements you need to qualify for an OPCF 43 endorsement. It is always best to check with your isure broker about your own insurance company, but the standard rules are as follows:
- The vehicle needs to have less than 5,000 km showing on the odometer.
- The vehicle must be new (not previously owned).
- You must have a bill of sale.
- The vehicle cannot be a demo vehicle.
Why is the OPCF 43 Worth the Cost?
The OPCF 43 endorsement cost differs with different insurance companies. When you drive your brand-new vehicle off the dealer’s lot, it immediately begins to depreciate. If you get into an accident six months after purchasing the vehicle, you might not even receive enough money back to pay off what you owe on it. Depending on the insurance company, you can get that OPCF 43 endorsement anywhere up to 12 months after you purchase the new vehicle. *Obvious restrictions apply if there’s no damage to the vehicle and other requirements have been met.
We always suggest that you apply the OPCF 43 before you pick up the vehicle because you never know what can happen on the road. Speak with one of our isure representatives if you are thinking of buying a new car. We can help you get the right coverage for your new vehicle!
Ontario Policy Change Forms (OPCF) allow you to amend your Read more
Loss of use coverage on your auto policy can help Read more
As an Ontario resident, you are required to legally carry Read more
