How OPCF 43 Works
If you are buying a vehicle, you will use OPCF 43. However, if you are leasing, you must use OPCF 43A. While the protections are nearly identical, the 43A version is specifically structured to recognize the leasing company’s financial interest in the vehicle.
While 24 to 36 months is the standard offering, many Ontario insurers have expanded this endorsement to 48 or even 60 months for an additional fee, reflecting the reality of longer financing and lease terms.
Since most vehicles depreciate in value, totalling a car within two or three years can mean that your claim amount will be significantly smaller than the initial price of your vehicle, putting you under financial stress after losing your car. With OPCF 43, you can have peace of mind knowing that if anything happens, you’ll be able to recoup the whole cost of your initial vehicle purchase.
How Does Car Depreciation Work?
When you buy a new car, you’re buying it at full market value. But once you start driving it off of the lot, it typically starts losing its value. A new vehicle typically loses approximately 20% of its value within the first 12 months of ownership, followed by a decline of roughly 10% to 15% for each subsequent year.
After five years, your car might only retain 40% of its original value, meaning that if you face a total loss, the insurance company might only pay a fraction of what you initially paid for it without OPCF 43.
Why Do I Need OPCF 43?
You need OPCF 43 as a way to protect yourself from financial loss in case of theft or total loss of your vehicle. With this specific endorsement, you can be assured that you’ll be able to get good value from your insurance claim. For example, say you initially bought your vehicle for $25,000 and had a crash that totalled it after a year.
A typical insurance claim might only give you $17,000 after your insurer factors in the car’s depreciated value. With OPCF 43 applied to your insurance policy, you would retain the full value of your vehicle in a claim and save thousands of dollars, giving you a lot of financial security and the option to buy a similar model as a replacement.
How Much Does OPCF 43 Cost and Is it Worth it?
Adding OPCF 43 to your auto insurance policy adds around $2 to $5 to your annual premiums. Depending on your insurance broker or company, you might save some money by bundling OPCF 43 with your base car insurance policy or other endorsements such as OPCF 20.
If you want to drive your car with the certainty that you’ll be able to retain its value in the event of a total loss, then OPCF 43 is definitely worth adding to your auto insurance policy. Losing your car to a theft or a bad accident can cause a lot of stress, and having the option to claim the full value of your vehicle will significantly reduce the financial impact of such an event.
Mechanics of OPCF 43
When your car is declared a total loss by your insurance company, your claim will be reviewed by the insurance company. If you have the OPCF 43 endorsement on your insurance policy, your insurer will pay out the lowest of the following amounts:
- The initial purchase price of your vehicle.
- The list price that was suggested by the manufacturer at the time you purchased your vehicle.
- The price of a similarly equipped replacement car model.
Take note that these may be lower than the actual market value of your car at the time of the claim, but only if your car appreciated in value instead of depreciating. However, this is not typical and usually only happens for rare car models or
Limitations of OPCF 43
While OPCF 43 does protect your car’s value from depreciating over time, there are a few limitations that you should be aware of.
Sometimes, a car’s value can appreciate instead of depreciating, meaning that it actually becomes more valuable over time. Car value appreciation is not typical, but it can happen if your vehicle is a rare or limited model, or sees an increase in demand after you buy it. When this happens, having OPCF 43 as an endorsement on your insurance policy can work against you since it allows the insurance company to pay out a lower amount than your car is currently worth.
Eligibility is strictly limited to the first owner of a brand-new vehicle. You generally cannot add OPCF 43 if you purchase a used car or a ‘demo’ vehicle that has already been registered, even if it has very low mileage. You are also not eligible for this endorsement if you are buying a used car.
This endorsement also doesn’t cover depreciation for repaired vehicles, which means that if you previously got in an accident and had your car repaired, you won’t be able to rely on OPCF 43 to maintain your vehicle’s value. Also, OPCF 43 only covers the vehicle itself and not individual vehicle parts such as the car battery, tires, or other replacement parts.
Key Advice from MyChoice
- Insurers will not consider your vehicle’s fair market value for your insurance claim if it appreciates while you have OPCF 43 on your policy.
- You can’t add OPCF 43 to your policy if you’re buying a used car, and you can no longer have it as an option if your car suffers damage from an accident and is subsequently repaired.
- In case of a claim, insurance companies will choose the lowest of three possible values, though the payout will usually be higher than your car’s depreciated value.