3 Insurance Endorsements to Consider if You're a New Driver
New driver not sure what optional coverage to opt for? We have all you need to know about car insurance endorsements you shouldn't be without.
1. Accident forgiveness (OPCF 39)
Adding an accident forgiveness rider to your car insurance policy can waive any rate increase you might otherwise see after your first at-fault collision. However, it’s important to note that this endorsement only applies to your first at-fault collision, and will not apply if you committed a criminal code offence that resulted in the collision, such as impaired driving. This coverage also requires your driving record to be clear of major convictions, like using a hand-held electronic device while driving.
This endorsement is often easiest to get with a clean record, which makes it a great option for inexperienced drivers. Keep in mind that although accident forgiveness protects you from a rate hike, the collision will still be visible on your driving record. In other words, the accident is forgiven but not forgotten. So, if you take advantage of accident forgiveness with one insurance provider and then shop for a lower car insurance rate and switch to a different company, your at-fault collision can still impact the premium you’re able to secure with your new provider.
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2. Loss of use coverage (OPCF 20)
Some drivers assume their auto insurance policy automatically covers the cost of a rental car in the event of a longer-than-anticipated collision repair. But car rental costs fall under loss of use coverage, an endorsement that covers transportation costs if your vehicle is out of commission.
This insurance add-on can provide relief for new drivers who have become reliant on their vehicle for everyday travel. Without this coverage, you could end up stuck with no way to work or school while your vehicle is getting repaired. Costs like car rental fees (for a vehicle similar in size to your own), taxi fares, and public transportation can be covered, and you’ll typically remain covered from the day you submit your claim to the day your vehicle is either repaired, declared a total loss, or until your coverage limit is reached. However, to qualify for this endorsement, you may need to have collision, comprehensive, or specified perils coverage already in place.
3. Depreciation waiver (OPCF 43)
As a new driver, you may be eager to purchase your first vehicle brand new. And though your car may remain shiny for your first couple years of ownership, it starts to lose value, or “depreciate,” the minute you drive it home from the dealership.
A depreciation waiver ensures your insurance company will not deduct depreciation from your vehicle’s replacement value when you make a claim for a theft, loss, or general damage. This endorsement, therefore, requires your provider to pay out your claim according to your vehicle’s original value, which can be most beneficial in the event of a total loss. That way, you may receive a new vehicle that’s valued at the same original purchase price as your totalled vehicle. However, this endorsement only applies to newly produced and manufactured vehicles with zero repairs or previous owners on record.
Should you opt for a car insurance endorsement if you’re a new driver?As you search for ways to customize your auto insurance policy, your car insurance rate may start to look a little different. If you think the new terms and conditions of the coverage you are securing are worth the additional cost they add to your premium, then an endorsement is a good option for you.
And if your premium increases more than you’d like after adjusting your policy, be sure to compare car insurance rates to see if a different provider can offer you the coverage you want at a lower price.
Michelle Bates is an editor/writer at RATESDOTCA, a leading rate comparison website where Canadians can secure the best rates on auto and home insurance, mortgages, and credit cards for free.