After a car accident, your first concern is making sure everyone is safe. Your second concern is usually figuring out how you are going to get to work on Monday.
If your car is severely damaged or undrivable, you need a replacement vehicle right away. Many drivers assume their insurance company will automatically provide a rental car while theirs is in the shop.
In reality, whether you get a rental car—and for how long—often depends entirely on an optional coverage called OPCF 20 Loss of Use.
Understanding how Loss of Use coverage generally works can save you from a major financial headache if you ever find yourself suddenly without a vehicle.
What Is OPCF 20 Loss of Use Coverage?
In Ontario, OPCF 20 (often simply called "Loss of Use") is an optional endorsement you can add to your auto insurance policy.
If your vehicle is damaged or stolen in a covered claim—such as a collision or weather event—this coverage pays for a temporary replacement vehicle, like a rental car, or reimburses you for transportation costs like taxis and public transit while you are without your car.
It is important to understand that OPCF 20 only applies when you are making a valid claim for physical damage to your vehicle. It generally does not cover rental costs if your car simply breaks down due to mechanical failure.
When Does It Apply?
Loss of Use coverage generally kicks in during situations like:
- Your car is in the repair shop after an at-fault accident.
- Your car is stolen and you are waiting for the police to recover it or the insurer to settle the claim.
- Your car is damaged by hail or a falling tree branch and needs extensive bodywork.
If you are in a not-at-fault accident, your rental costs are typically covered under Direct Compensation Property Damage (DCPD) without needing to use your OPCF 20 endorsement. However, having OPCF 20 is crucial for those situations where you are at fault or when dealing with a comprehensive claim.
How Do the Limits Work?
A common misunderstanding is that Loss of Use coverage provides an unlimited rental car until your vehicle is perfectly fixed. Unfortunately, that is rarely the case.
Most policies have a specific dollar limit (e.g., $1,500 or $2,000 per claim) or a specific day limit. Once you hit that cap, the insurance company will generally stop paying for the rental, and any remaining days will come out of your own pocket.
The Part Most People Miss
The biggest issue drivers run into with OPCF 20 is that their rental limits run out long before their vehicle is actually repaired or replaced.
With modern vehicles requiring specialized sensors and computers, repair shops are frequently delayed by backordered parts. If your car sits in the shop for two months waiting for a bumper, but your rental coverage has a $1,500 limit, you could end up paying for several weeks of rental car costs yourself.
The second major blind spot involves total loss claims.
If the insurance company decides your car is too damaged to repair, they will declare it a total loss and offer you a settlement based on its Actual Cash Value. What many people do not realize is that once the insurer makes a formal settlement offer, they will usually terminate your rental coverage within a few days—even if you have not found a new car to buy yet, and regardless of whether you have used up your maximum dollar limit.
This creates a massive time crunch. You suddenly have only a few days to negotiate your settlement, return your rental, and find a replacement vehicle.
This is why establishing an educational benchmark of your vehicle's market value before an accident happens is so important. If you already know what your car is worth, you will be much more prepared to quickly review a settlement offer and move forward before your rental coverage disappears.
Frequently Asked Questions
While you do not typically pay a separate deductible just to get the rental car, you are still responsible for your primary collision or comprehensive deductible for the damage to your own vehicle.
Usually, no. Most policies provide coverage for a vehicle of a "similar size and class" to what you currently drive, up to a certain daily rate limit. If you drive a compact car and want to rent a luxury SUV, you will generally have to pay the price difference yourself.