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FAQ: What is Loss of Use Coverage

Tuesday, 29 June 2021

Shopping for car insurance? The process might feel overwhelming and confusing with all the options and coverages to choose from – but BIG is here to make the process smooth and simple. Your broker will likely offer you “Loss of Use” coverage to add to your policy. If you’re not sure what it is, you’ve come to the right place. This blog will break down what loss of use coverage is, how it works to help you make an informed decision about your coverage. 

Imagine This…

Car accidents can cause significant damage to your car and can even result in a total loss. Major repairs can take days, sometimes weeks to complete and the same goes for vehicle shopping. So, while you’re waiting for repairs to be completed or until you find a new car, how are you getting around? Without loss of use coverage, you would be paying out of pocket for alternative transportation such as a rental car, taxi, or public transit.

What Is Loss of Use?

When you have loss of use coverage, your insurance carrier will provide a replacement vehicle or reimburse you for your transportation costs while your vehicle undergoes repairs, or you find a replacement in an insured claim. In a qualifying claim, you can be reimbursed for having to rent a car, take public transit, or take a taxi or ride share.

In Ontario this coverage will appear on your policy as OPCF 20. In Alberta and Atlantic provinces, it will appear as SEF20. If you are unsure whether you have this coverage included on your existing policy, it’s always best to check in with your broker. BIG brokers will always take the time to help you understand your policy in detail.

Do I qualify for loss of use coverage?

Loss of use coverage is available when you have physical damage coverages on your car insurance policy such as collision coverage, comprehensive coverage, or all perils coverage. To learn more about physical damage coverages, check out our blog that explains it here: What is Physical Damage Coverage in Insurance.

How Much Does It Cost?

Loss of use coverage varies across BIG’s various insurance carriers, and it can also fluctuate based on the coverage amount you want. Generally, it could cost you between $60 to $80 for coverage for the year. Discounts and bundles can also factor into the cost, such as bundling it with Rental Car Coverage, which we explain in another blog here: Rental Car Insurance Coverage.

How Long Does the Coverage last?

Loss of use coverage will typically last until either your vehicle repairs are completed, you receive a total loss settlement, or you have reached your coverage limit – whichever comes first. As we mentioned above, different limits available for this coverage – $1500 is usually a standard amount, but you can request higher limits from your broker.

Are there any restrictions?

Loss of use coverage does have a few limitations that you should be aware of.

  1. The vehicle you rent should be a similar size, make and model to the vehicle that was damaged, totalled, or stolen.
  2. For drivers under the age of 21, it’s unlikely that you’ll be able to rent a vehicle based on rental car company restrictions. Loss of use coverage can still be used to cover public transit or taxi costs in this case.
  3. Gas and additional costs associated with the rental are usually not covered by loss of use coverage.

Why Should I Get Loss of Use Coverage?

While loss of use is an optional endorsement, having it on your policy can help alleviate the emotional stress and financial burden when you’ve been through an accident. The situation can be incredibly taxing as you arrange repairs, shop for a new vehicle, and so on. Not having to worry about paying for a car rental removes one of the many moving pieces while you go through the process. As an optional coverage, it might not be worth the investment for you if you can go without a car for a week, can walk or cycle to work. A BIG broker can help you decide whether it’s a good fit for you.


With a better understanding of loss of use coverage, we hope you can make a wise decision about the coverages you need. If you ever have questions about your existing policy, our brokers are here to answer your questions. To add loss of use to your policy, contact our brokers. And, if you’re ready to get a free quote, click the button below to get started!

By: Amy Legault