Getting into a car accident is stressful enough, and being without a vehicle while your car’s in the shop just adds to the headache. Depending on the damage, repairs can take days or even weeks, and you’ve still got places to be. That’s where loss-of-use coverage comes in.
In this article, we’ll explain what loss of use coverage is, how it works, how to figure out if it’s right for you, and how much coverage you might need.
What is loss of use coverage?
Loss of use coverage is an optional car insurance endorsement, which you may also see referred to as OPCF 20 in Ontario and QEF 20 in Quebec.
Its purpose is to cover the cost of alternate transportation, like rental cars, taxis, rideshares, or public transit, while your vehicle is temporarily unavailable due to a covered event, like a car accident. However, because this endorsement is optional, you’ll need to add it to your car insurance policy if you want the extra protection.
What loss of use covers
Loss of use coverage helps keep you moving while your car is out of commission after a covered event. It typically covers:
- Rental car expenses during vehicle repair or replacement
- Costs associated with taxis, rideshares, or public transit
Keep in mind that coverage limits usually apply, and there may be daily maximums and a limit to the total duration of coverage.
In most cases, your insurance provider will end your loss of use coverage after:
- Your vehicle has been repaired,
- You’ve met your coverage limit,
- Or you’ve received a settlement for a total loss.
Do you need loss of use coverage?
It can be hard to know if you really need loss of use coverage. If you’ve been driving for years without an accident, you might be tempted to skip this optional endorsement when building your insurance policy. But it’s worth thinking about whether it makes sense for your situation.
Ask yourself a few key questions, such as:
- How often do you rely on your car? Is it essential for your daily routine?
- Do you have easy access to alternative transportation?
- How does the cost of adding this coverage compare to what you’d pay out of pocket if your car were in the shop for a week or more?
- How comfortable are you with taking on that risk financially?
Your answers can help you decide if loss of use coverage is a smart addition to your policy. For instance, some drivers who often benefit from loss of use coverage include:
- Those who rely on their vehicle daily for work or commuting
- High-mileage or frequent drivers
- Families or parents requiring reliable transportation for children and activities
- Those who lack access to public transit or alternative transportation options
Cost of car insurance with loss of use coverage
The cost of adding loss of use coverage to your car insurance policy can vary by province and insurer. On top of that, your driving history, type of vehicle, location, and claims record can also play a role.
To give you a general idea of how much loss of use coverage costs, though, here are two example quotes for car insurance in Ontario and Quebec with and without loss of use coverage:
| Quote with loss of use coverage | Quote without loss of use coverage | |
| Ontario | $144 | $153 |
| Québec | $99 | $92 |
Although these examples are provided for general illustration only and do not guarantee exact pricing, you can see that adding loss of use coverage generally increases your premium by only a small amount.
Compared to the potential out-of-pocket costs of arranging alternative transportation after an accident, some drivers prefer to pay a little extra now so that if they ever need coverage, they aren’t stuck with a big bill later.
To find out how much car insurance with loss of use coverage would cost you, the next step is to get a quote, which you can do in 4 minutes or less with YouSet. Once you have your quote, you can easily add or remove loss of use coverage to see the price difference in real-time.
What is a good loss of use coverage amount?
A typical amount of loss of use coverage included when you add it to your policy is usually between $1,500 and $2,500.
That said, coverage amounts can vary depending on your insurance provider and the province you live in. You may also have the option to choose higher limits or time-based coverage instead if the standard amount of loss of use coverage isn’t enough to meet your needs.
How loss of use coverage works
Loss of use coverage helps pay for transportation expenses if your car is temporarily unusable after a covered event, such as an accident.
But how does it actually work, and how do you get reimbursed? Here’s a high-level breakdown of how loss of use coverage usually works in Canada.
- Add it to your policy: Loss of use is an optional type of coverage, so you’ll need to add it to your car insurance policy before something happens. It cannot be added retroactively.
- Experience a covered event: If you get into an accident or another covered event that leaves your car temporarily unusable, loss of use coverage becomes relevant.
- Notify your insurance provider: Contact your insurer as soon as possible to report the incident and file a car insurance claim.
- Submit documentation: You’ll need to fill out a proof of loss form or similar documentation to support your claim.
- Claim review: Your insurance provider reviews the claim, checks your policy details, and confirms you’re eligible for coverage.
- Get alternative transportation: Either you or your insurance provider will arrange for alternative transportation, like a rental car, rideshare, or transit.
- Keep your receipts: Keep, make copies of, and submit any relevant receipts or documentation for transportation costs.
- Get reimbursed: If your expenses are approved, your insurance provider will reimburse you up to the coverage limit stated in your policy.
- Coverage ends: Loss of use coverage ends once your vehicle is repaired or replaced, or once you hit your coverage limit.
Next steps
Loss of use coverage can give you the peace of mind you need. It’s a simple add-on to your car insurance policy, but it can make a big difference if you ever get into an accident.
With YouSet, you can find the right coverage at the best price. Compare quotes from multiple insurers in just 4 minutes, access exclusive broker discounts, and lock in the best price year after year. Whether you’re setting up a new policy or updating an existing one, YouSet makes it easy to find the right coverage at the best rate.
