Having your car stolen or damaged in an accident can be a stressful experience. Especially if you rely on your car daily. The last thing you need to worry about is how you’ll get to work, pick up groceries, or get your kids to school on time. Luckily, the transportation replacement endorsement (commonly known as “rental coverage” or “loss of use”) covers the cost of alternative transportation options, so you can get back to your normal routine as quickly as possible.
What is a transportation replacement endorsement?
A transportation replacement endorsement is an optional addition to the existing coverage in your car insurance policy. This endorsement covers the reasonable cost of transportation alternatives (like a rental vehicle or Uber) while your car is being repaired for damage caused by a perilopens a pop-up with definition of peril you’re insured for, or if your vehicle was stolen and you have All perils, Comprehensive, or Specified peril coverage. It’s important to note that this endorsement is limited up to a maximum dollar amount or a certain number of days and limits will vary depending on your insurer.
How can I qualify for loss of use coverage?
Liability coverage is required in Canada, but to qualify for the transportation replacement endorsement, you must opt-in for optional physical damage coverages, like comprehensive or collision coverage. Always double-check what coverage is required by your insurer to qualify.
What are the limitations of loss of use coverage?
Your transportation replacement endorsement will begin at the time of your loss if your vehicle isn't safe to drive after a collision, so you can immediately pick up a rental car or call an Uber. If you can safely drive but your vehicle needs to go into the shop for repairs, your transportation replacement endorsement will begin once you drop it off at the body shop. In cases where your vehicle's stolen, your coverage begins at 12:01 a.m. of the day after you file a stolen vehicle report to your insurer or the police.
Your coverage will end once the repairs on your vehicle are complete, you’re offered a total loss settlement, or you reach the limit of your loss of use coverage — whichever comes first!
The limits on this endorsement vary by insurer. For example, some insurers may have a maximum dollar limit for replacement transportation, while others only provide reimbursement for a total number of days. Policies will vary depending on your insurer and the province you live in, so always check with your licensed car insurance broker to see if you have enough coverage and if you need to make any changes to your endorsement limits.
How can I make changes to my transportation replacement endorsement?
Body shops are taking longer to complete repairs because of ongoing supply chain disruptions and labour shortages, so you may be waiting a while to get your car back on the road.
Plan ahead and contact your broker to see if your endorsement limit covers enough days or dollars to accommodate the current market conditions. Increasing your limit will only raise your premium by a few dollars each year and can save you from a costly and stressful surprise if repairs take longer than expected.
If you’re currently using your transportation replacement endorsement after filing a claim, check with your assigned adjuster to review your options. They may recommend using a rideshare program or selecting a cheaper rental vehicle to extend your coverage.
Connect with your broker to make sure you have the right coverage in the event of a collision. And while you’re at it, why not ask if you qualify for any of these common car insurance discounts?
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