As an Ontario resident, you have a requirement to legally carry valid auto insurance every time you drive. With the price of fuel being unpredictable, you may be wondering how to save more on your premium. Auto insurance endorsements allow you to add or remove coverage from your current policy to suit your changing needs. So, if you are looking to revisit your coverage, here’s our run-down of auto insurance endorsements worth looking into.
Four types of basic auto coverage
When it comes to car insurance, you have basic and mandatory coverage. Additionally, you then have add-ons and optional coverage. According to FSCO, at the very minimum, a standard Ontario car insurance policy must include:
- Third-Party Liability
- Statutory Accident Benefits
- Direct Compensation Property Damage (DCPD)
- Uninsured Automobile
To learn more about how your premiums are calculated, click here.
What are auto insurance endorsements?
In Ontario, endorsements are referred to as Ontario Policy Change Forms (OPCFs). Also known as a “rider”, an endorsement is an extra form of coverage. You can purchase them to ‘add-on’ to your existing policy. All types of insurance policies have limits and exclusions around insured perils and amount of coverage. Depending on your demographic, location or vehicle needs, you can take advantage of certain endorsements to provide more custom coverage.
An insurance endorsement gives you more flexibility to customize your coverage by allowing you to:
- Increase or decrease coverage limits
- Deduct certain parts (in allowance by law) to lower the total premium amount
- Change your personal information, or
- Make other special amendments to restrict or expand certain terms covered by your car insurance policy, giving you more flexibility
FYI: An endorsement is an optional addition that provides extra coverage for an additional fee or waives coverage for specific situations. It is also legally binding.
Here are a few examples of the most common Ontario auto insurance policy endorsements:
1. OPCF 20: Loss of vehicle use insurance endorsement
If you are without a vehicle while your car is being repaired after a collision, this endorsement covers the cost of a rental car. You must already have either collision coverage, comprehensive coverage or specified perils coverage. It’s important to note that the damage or loss must be caused by an insured peril listed in your policy. In other words, if you don’t have comprehensive car insurance and your car is stolen, this insurance endorsement won’t help you.
2. OPCF 27: Liability for damage to non-owned automobiles
This endorsement (only valid in Canada or the U.S.) offers liability coverage and accident benefits if you damage a vehicle you don’t own while driving it. It applies to rental cars or a car borrowed from a friend or family member. Car rental companies call this type of coverage a “collision damage waiver” or “rental vehicle insurance endorsement.” They typically sell it as an optional add-on.
Bonus tip: If you have this endorsement, you may be able to avoid buying the rental company’s optional insurance when you rent a vehicle. Here are four more tips for saving on your next vehicle rental.
3. OPCF 39: Accident waiver/forgiveness
This endorsement ensures that after your first at-fault claim, your driver rating isn’t affected and your premiums won’t increase when your policy renews. Unfortunately, just because your premiums don’t rise doesn’t mean the at-fault collision won’t appear on your driving record. Should you ever switch insurance providers, you can still face higher rates for having an at-fault claim on your record.
4. OPCF 43: Removing depreciation deduction
As soon as you drive a new car off the lot, it starts depreciating in value. Generally, when you make a claim for loss or damage, your insurer will deduct depreciation from the value of your car before it pays you out. A depreciation deduction endorsement ensures you’re reimbursed for the full purchase price, not the depreciated value. This type of endorsement is only available for the first two years of ownership. It makes the most sense, as your car’s full value is still quite high during this period. Your vehicle must also be totally brand new (i.e. no previous owners and no previous repairs). Without it, you may find yourself without enough money to buy a new vehicle, should you need to.
5. OPCF 44R: Family protection coverage
With this insurance endorsement, eligible family members are covered by the same limits as your mandatory third-party liability coverage. Even if everyone in your family is a good driver, third-party liability protects against the at-fault actions of other drivers. In particular, it protects you against underinsured drivers, uninsured drivers (which is illegal in Ontario) or if you are the victim of a hit-and-run accident.
6. Minor Conviction Protection
Minor conviction protection safeguards you against rate increases due to minor traffic violations. Like the accident forgiveness endorsement, it only applies to your first conviction and you must have held a valid driver’s license for at least six years and have had no convictions in the previous three years.
You must apply for this endorsement from your current insurer. With this endorsement, you are protected from a rate increase if you commit a minor traffic offence, such as:
- Failure to signal before changing lanes (which is a serious offence)
- Disobedience to a traffic sign
This endorsement can be a lifesaver if you have multiple convictions in a row. As a result, your rates can go up significantly.
Amending your insurance policy
After making a policy change, always maintain a copy of the new document that demonstrates or specifies the new endorsement. When an endorsement lowers or raises your coverage, it can affect your premium. Even if you’re on a tight budget, most endorsements will only add a few dollars to your monthly bill. Therefore, it’s definitely worth looking into your options to see if there’s one that’s right for you. If your premium increases and you don’t have an endorsement to protect you against it, isure will research rates to be sure you’re still getting the best deal.
Finding the right riders will depend on a variety of factors. Consider what you use your vehicle for (pleasure, business, etc.) Additionally, consider whether you have a new or old vehicle, and the number of drivers on your policy. Be sure to speak with your isure broker today to cover other cost-saving ways that will keep your car on the road and more money in your pocket!