New Vehicle and Auto Insurance (OPCF 43)

Elliott Insurance Services    February 20, 2020
New Vehicle and Auto Insurance

If you have recently purchased a new vehicle or are thinking about purchasing a new vehicle, you might have some questions on how that will affect your insurance policy. Your insurance premium will be affected by changing any vehicle, but is there anything else you should be aware of with a new vehicle?

We aim to demystify the experience of purchasing a new vehicle in terms of your insurance policy.

Will My Premium Go Up?

Auto insurance is based on the vehicle and the driver that the insurance company is insuring. There are a lot of factors that determine your insurance rate, so it is extremely difficult to say definitively if your insurance premium will increase or decrease with a new vehicle.

Depending on your previous vehicle, your rates could go down due to the safety features or safety rating of your new vehicle. That being said, it could cost more to repair the new vehicle, and in that case your premiums would go up.

Simply stated, there is no way to predict what your rates will do in a broad sense. If you are seriously considering a new vehicle and you know the exact vehicle you will most likely be purchasing, you can contact your broker to get a rough quote on your policy for switching to the newer vehicle.

Are There Endorsements for New Vehicles?

Yes! You should be aware that there is an endorsement referred to as either a “Waiver of Depreciation” or an “OPCF 43”. This endorsement changes how the insurance company values your vehicle. Normally if you have a claim, an insurance company will look up the book value of your vehicle and deduct the depreciation value from the book value. When you add an OPCF 43, the insurance company will not deduct the depreciation of the vehicle for a set amount of time depending on the company’s rules. The OPCF 43 usually is applied for 2-5 years depending on the insurance company.

Are There Rules to Get an OPCF 43?

Yes, every company has their own rules as to what is required to qualify for an OPCF 43 endorsement. It is always best to check with your broker about your own insurance company, but the common rules are as follows:

  • The vehicle needs to have less than 5,000kms showing on the odometer.
  • The vehicle must be a new vehicle (not previously owned).
  • You must have a bill of sale.
  • The vehicle cannot be a demo vehicle.

What Information Does My Broker Need?

In order to get the “OPCF 43” or “Waiver of Depreciation” you need to supply your broker or insurance company with the bill of sale for your vehicle and qualify you meet the requirements for the OPCF 43 to be applied (section above).

Why is the OPCF 43 Worth the Cost?

The OPCF 43 endorsement cost differs with different insurance companies. With that in mind, the OPCF 43 is almost always worth the cost of purchasing the endorsement.

If you drive your brand-new vehicle off the dealer’s lot, it is immediately depreciating. If you were to get into an accident 6 months from the time you purchased the vehicle, you might not even get enough money back to pay off what you owe on the vehicle.

Don’t let that happen to you, call your broker today to make sure you have an OPCF 43 on your vehicle. Depending on the insurance company you are with, you can get that OPCF 43 endorsement anywhere up to 12 months after you have purchased the new vehicle (obvious restrictions apply of no damage to the vehicle and other requirements have been met).

It is always suggested that you apply the OPCF 43 before you even pick up the vehicle because you never know what can happen on the road.

If at any point you need help understanding this endorsement or need a quote, please contact us to learn more.

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