Auto insurance policies provide drivers with financial protection against various risks. However, you’ll need coverage such as Specified Perils, Comprehensive or All Perils to be covered against fire damage to your vehicle.
OPCF 40 is an endorsement that adds a deductible to covered fire claims. It may also help reduce your insurance premium.
What does OPCF 40 do? When does it make sense to add it to your policy? Read on to learn more.
OPCF 40 at a Glance
- OPCF 40 allows you to add a deductible to fire-related claims.
- The endorsement may lower your premium because you agree to pay part of a covered fire loss.
- It may suit drivers who can comfortably pay the deductible if their vehicle is damaged by fire.
How the OPCF 40 Endorsement Works
Specified Perils, Comprehensive and All Perils coverage can protect your vehicle against fire damage. Fire claims are normally not subject to the deductible shown for these coverages.
OPCF 40 changes this. By adding the endorsement, you agree that the deductible shown on your Certificate of Automobile Insurance will apply to each covered fire claim.
The endorsement applies only to the vehicle listed on the certificate. It doesn’t add fire coverage or change the other terms of your policy.
Read More: Learn How Comprehensive Car Insurance Covers Fire and Other Perils
Why Would You Want a Fire Deductible?
The main reason to add OPCF 40 is to lower your insurance premium. By accepting a deductible, you agree to pay more yourself if your vehicle is damaged by fire.
Before adding it, ask your insurer:
- How much will OPCF 40 reduce my annual premium?
- What deductible will apply to each fire claim?
- Which vehicle does the endorsement cover?
- When will the endorsement take effect?
If the premium reduction is small, accepting a large deductible may not be worthwhile.
How Much Could You Save?
The potential savings vary depending on the vehicle, the deductible and the insurer’s rates.
Ask your insurer for two otherwise identical quotes: one with OPCF 40 and one without it. This will show how much you would actually save by accepting the fire deductible.
Balance that saving against the amount you would have to pay after a fire claim. If OPCF 40 doesn’t reduce your premium, there is no financial benefit to adding the deductible.
When Might OPCF 40 Make Sense?
OPCF 40 may make sense when:
- the premium reduction is large enough to justify the deductible;
- you can comfortably pay the deductible after a fire;
- the vehicle still has enough value for the remaining settlement to be useful; and
- the endorsement applies to the correct vehicle.
The cost-benefit calculation may be less favourable for an older vehicle with a lower market value. A large deductible could leave you with a relatively small payment after a total loss.
Read More: Other Available Auto Insurance Coverages in Ontario