Loss Of Use Car Insurance

What Is Loss of Use Car Insurance?

Imagine this: your car is being fixed after an accident, and you can’t use it for a while. That’s when loss of use car insurance helps. Depending on the damage, repairs can take anywhere from a couple of days to weeks.

Not having a car for even a few days can mess up your daily life, like getting to work, shopping for groceries, or taking your kids to school. Loss of use coverage is your backup plan to keep you moving.

Here, we’ll go over what loss of use means for car insurance and how to check you’re protected.

Understanding loss of use car insurance coverage

Loss of use car insurance helps pay for another way to get around when your car is out of commission due to repairs from an accident that’s covered by your insurance policy. It could be paying for a rental car, public transportation, or even rideshare like Uber.

More than just helping with costs, loss of use coverage gives you peace of mind. It’s comforting to know that even if your car is out of action, your life doesn’t have to stop. You can still get to where you need to go without extra stress. It’s all about making sure you can keep doing your everyday errands without your car.

How loss of use coverage works

Imagine your car is hit in an accident, and you can’t drive it. Now, you’re without a way to get to work, drop the kids at school, or do your daily errands. This is when loss of use coverage steps in to save the day.

Step one: The first step is to tell your insurance company about the damage. They check everything to make sure your insurance covers this kind of damage. Once they give the green light, they start your loss of use benefits. You may need to pay a deductible first before your insurance pays for the rest.

Step two: Your insurance provider can help pay for different ways to get around while your car is in the shop. This might mean they’ll cover the cost of a rental car for you. Or, if you prefer not to rent a car, they might pay for your bus rides, subway tickets, or even your rides with Uber or Lyft. The goal is to make sure you’re not stuck without a way to get around.

How loss of use coverage differs across provinces

In Canada, there are three common types of loss of use coverage:

  • OPCF 20 (Ontario Policy Change Form) in Ontario
  • SEF 20 (Standard Endorsement Form) in Alberta and Atlantic Canada
  • QEF 20 (Quebec Endorsement Form) in Quebec

In BC, when you choose optional insurance like collision or comprehensive, loss of use coverage is already included.

In Saskatchewan, all drivers have a basic package that includes some level of loss of use coverage, but drivers can choose to buy more coverage if they want better benefits, like higher limits for rental car costs.

In Manitoba, basic autopac insurance includes loss of use coverage for situations like theft, fire, or collision with an animal. Drivers can buy optional Autopac coverage for wider protection.

In Ontario, Alberta, and Atlantic Canada, you can get basic coverage for loss of use, but only if your car is stolen or if the accident wasn’t your fault and you’re claiming through direct compensation-property damage (DCPD). For other accidents like at-fault collisions or other types of damage, loss of use coverage is not included.

In Quebec, loss of use coverage is not included.

However, drivers in Ontario, Alberta, Atlantic Canada, and Quebec can get better loss of use coverage by adding an endorsement to their policy, like the OPCF 20 in Ontario, SEF 20 in Alberta/Atlantic Canada, and QEF 20 in Quebec. With these endorsements, you can claim loss of use coverage for almost any accident as long as your policy covers it.

Requirements and limitations

Loss of use coverage, also known as transportation replacement or rental vehicle insurance, can vary widely across provinces and insurance companies. Nevertheless, there are some requirements and limitations that are relatively standard across Canada.


  • This coverage isn’t always automatically in your insurance. You may need to add it to your car insurance policy as additional coverage.
  • Before you get a rental car, you need to tell your insurance provider about the damage to make sure they’ll cover the rental.
  • You may have to have specific coverage, like comprehensive and collision coverage or all perils coverage, in order for your insurance company to cover your rental.
  • You may need to pay a deductible before the insurance company will cover you.
  • Some insurance companies want you to use the specific car rental companies they choose.


  • Most insurance plans have a cap on how much they’ll pay each day (daily limit) and in total (total limit) for these transportation costs. Your coverage limit will be outlined in your auto insurance policy.
  • The coverage is usually limited to the duration of the repair or until the insurance provider pays out a total loss settlement. It doesn’t cover delays caused by the repair shop’s schedule or parts availability. 
  • Some policies limit the type of rental vehicles you can get. For instance, you might only be covered for a standard sedan, even if your own vehicle is a large SUV or a fancy sports car.
  • Loss of use coverage only kicks in for claims that are covered under your policy. If the damage to your vehicle isn’t covered (like damages from an uncovered event or if you’re at fault in a province with certain insurance laws), your loss of use coverage may not apply.

How much does loss of use coverage cost?

The cost of adding loss of use coverage to your car insurance in Canada can vary based on different things, such as which insurance company you’re with, the details of your car insurance coverage, and what kind of car you drive. Here’s a general overview:

Range of costs

Loss of use coverage is an extra part of your car insurance that’s actually pretty affordable. It could add just a few dollars to your monthly insurance bill, but it might be a bit more. Generally, it won’t cost more than a few tens of dollars each year.

Factors influencing cost

  • How much coverage you want
  • How high or low your deductible is
  • Your insurance provider
  • What type of car you have

Example costs

It’s hard to give exact numbers without a quote, but you might pay between $20 and $50 a year for this coverage, depending on the above factors. Some people might pay a bit less or more for this coverage, depending on their own situation and what the insurance company offers.

Is loss of use coverage worth it?

Choosing loss of use coverage really depends on what you need and how much you can spend. This coverage is great because it gives you a way to get around, like a rental vehicle, if your own car has to be fixed after an accident. It keeps your life running smoothly and can save you money on transportation when your car is in the shop. Plus, it’s nice to know you have this backup, which can make things less stressful if something happens to your car.

However, paying extra for this coverage might not make sense for everyone. If money is tight, you have another car you can use, or you don’t usually need a rental car; you might not find it necessary. Also, this coverage has certain limits, meaning it might not cover all your rental car costs.

When thinking about getting loss of use coverage, consider the following:

  • How much you rely on your car every day
  • If you could handle rental costs on your own without the coverage
  • How likely is it that you’ll need a replacement vehicle after an accident

Looking at these points can help you figure out if the extra cost is worth it for you, making it easier to decide if this coverage fits your needs and budget.

Frequently asked questions

What does loss of use mean for car insurance?

Loss of use for car insurance means if your car needs to be fixed because of damage, your insurance can help you get around other ways, like paying for a rental car.

How does insurance loss of use work?

If your car is damaged and being repaired, loss of use coverage helps cover the cost of other transportation, like renting a car, until your own car is ready or your insurance settles the claim, but only up to your coverage limit.

What does loss of use endorsement mean?

A loss of use endorsement is when you add extra coverage to your insurance policy. This extra part means your insurance can help pay for things like rental cars if your car can’t be used because of a covered accident or damage.

What is the economic loss of use coverage?

Economic loss of use coverage means if you can’t use your car because it’s being fixed, instead of paying for a rental car, your insurance might give you money based on not being able to use your car, depending on what your policy says.