Replacement insurance
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Automotive
Replacement insurance or rider 43?
On October 1, 2010, the replacement warranty sold by dealers and brokers was replaced by replacement insurance. Rider 43-Modification to Indemnity remains in effect. If you’re considering replacement cost coverage for your vehicle, you can choose between these two products. The two products have a few similarities:
- They complete an automobile insurance policy. Without the latter, it’s impossible to have replacement insurance or endorsement 43;
- They are insurance products issued by insurance companies;
- Their purpose is to obtain compensation in the event of a claim (total loss or partial loss).
There are also differences between the two products:
| FPQ No 5 Replacement Insurance | Endorsement 43E Modification to compensation |
|---|---|
| Fixed term of up to 7 years without renewal. No subscription and no renewal conditions. | Although a period is defined (1 to 6 years), it is renewable each year, at the same time as the policy, subject to a number of conditions. |
| Can be attached to any primary insurer. | Attached to the same primary insurer. |
| Available for new and used vehicles. | Available for new vehicles. |
| People at risk are eligible. | People at risk are not eligible. |
| Vehicles at risk are admissible. | Vehicles at risk are not admissible. |
| Offered by brokers or dealers. | Offered by insurers or brokers. |
| Partial losses | Partial loss |
| Damaged parts that cannot be repaired are replaced with new original parts. | Damaged parts are replaced with new ones, but not necessarily with original parts. Please note that if they are not available, the insurer will deduct a depreciation on the parts. |
| Total loss (or theft) - New vehicle | Total loss (or theft) - New vehicle |
| Obligation to replace the vehicle according to the option chosen when the policy is purchased: | Choice to be made at time of claim: |
| a) Replace the vehicle with a new one of equal or greater value from the designated dealer; or | a) Replace the vehicle with a new or used one of equal or lesser or greater value (from the dealer of your choice); or |
| b) Receive the indemnity payment and replace with the dealer of your choice. * The value will be calculated on a calendar-year model. Note: If you replace with a vehicle of higher value, you will have to pay the difference. | b) Do not replace the vehicle (cash indemnity. The value will be negotiated with the insurer) * Previous year according to availability and calendar if not available. Note: If you replace the vehicle with one of higher value, you will have to pay the difference. |
| Following a claim | Following a complaint |
| The policy terminates in total loss only. The insurer will refund the unused portion of the premium on a pro rata basis. This policy is not transferable to another vehicle. | The policy will not automatically terminate. The new vehicle may be covered by the same policy. But at renewal, will not be available under conditions. |
| Franchise | Franchise |
| No deductible to pay. Reimburses deductible up to $2500 for total loss. Reimburses deductible up to $250 for partial loss. | To be paid according to the amount selected in the policy. |
| Courtesy car allowance $75 day / $2250. | |
| Classes 33-35-36 admissible. | Not admissible. |
| Can be cancelled pro rata. | Can be cancelled with the short deadline rule. |
| *Average premium for a #5 FPQ with a broker: $928.00 *Average premium for a dealer: $1,555.00 *Source: L'AMF and Journal de l'assurance | |
Would you like a quote for replacement insurance or any other product? Don’t wait any longer, contact an Assurancia broker near you. What’s more, our Maîtres Indemnisation certification, exclusive to Assurancia brokers, guarantees you constant and regular follow-up in the event of a claim, and speeds up the settlement of your file!