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Replacement Cost Advantage«

Replacement Cost Advantage defined

How does Replacement Cost Advantage work?

If your car is declared a total loss within a period of up to 5 years of the time of purchase, we’ll replace it with a new one – the same model with the same options. That means there will be no depreciation of the value of your car. Please note that the original delivery date of the vehicle and the date the policy takes effect determine the expiry date of the Replacement Cost Advantage product.

Higher premium

Will my premium cost me more with Replacement Cost Advantage?

Yes. However, you will have the privilege of being able to replace your car with a new car of the same model. Since there is no depreciation, you will not lose out.

Total loss

What do you mean exactly by “total loss”?

If the estimated repair cost plus the salvage value of your vehicle exceeds its cash value prior to the damage, we may decide to treat the vehicle as a write-off instead of paying to repair it. As your insurance company, we will pay the pre-collision value of your car minus any deductible that may be applicable and keep the salvage. If your car is stolen and not recovered, this is also considered a total loss.

Dealer’s product

Is there a difference between the dealer’s product and Replacement Cost Advantage?

With a dealer’s insurance plan, you pay upfront when you buy the car, and if you incur a loss after three months, you must buy the coverage again (full price) when you replace the car. With us, your policy is renewed annually and you do not pay again if there is a loss during that year or if you decide to discontinue your insurance.

Depreciation defined

Could you define “depreciation”?

Depreciation refers to the decreasing value of a car once it leaves the dealer’s lot. The older your car gets, the more it depreciates. Depreciation is also based on, but not limited to:

  • the condition of the vehicle immediately before the damage occurred
  • the resale value
  • the normal life expectancy

Premium calculation

If I have a new car, how is my Replacement Cost Advantage premium calculated?

The premium increases with time as your vehicle ages. Your benefits increase when the car is older, as it will be replaced with a new car of the same model. Since there is no depreciation on the vehicle we will replace, you will not lose out.

2-year old car

If my car is 2 years old, am I eligible for Replacement Cost Advantage?

To be eligible, you must have carried a Replacement Cost endorsement from the time you purchased your new car, whether or not you were insured with us. If you buy a 2 year-old car, you are not eligible.

Monetary value

With Replacement Cost Advantage, do I have the option of receiving the monetary value rather than replacing the car?

In the event of a total loss, we will pay for the cost of replacing your vehicle with another new car having the same specifications and equipment. If we can’t locate a vehicle of like kind, quality and specifications, we will pay the original price that you paid, including taxes, not exceeding the current price or cost of purchasing a similar vehicle.

Different car model

What if I choose to replace it with a different car model? What will my insurance pay?

If you were to replace your car with a different model, we would pay the purchase price that you paid, not exceeding the price at the original date of purchase or the price it would cost to buy the car new today, plus applicable taxes. If the price of the new model were higher, you would be required to pay the balance.

Replacing options

With Replacement Cost Advantage, would you cover the cost of replacing all of the options?

Yes, if these options are still available.


Is Replacement Cost Advantage offered all across Canada?

No. This coverage is not available in the Yukon, the North West Territories, Nunavut, Manitoba, Saskatchewan or British Columbia.

Limitations and exclusions

Are there other limitations or exclusions regarding Replacement Cost Advantage that I should know about?

In Quebec, the value of your car must not exceed $65,000. In the rest of Canada, the value of your car must not exceed $100,000. This includes both taxes and accessories.

In Canada, including Quebec, you are not eligible if:

  • There has been a loss due to theft or attempted theft in the past 3 years.
  • Your vehicle is customized/modified.
  • There have been 2 at-fault losses in the past 3 years, this is not applicable in Ontario.
  • The principal operator has had his/her driving license suspended for a period of one year or more in the past 3 years, this is not applicable in Ontario.

In Quebec only:

  • There have been 2 or more accidents in the past 3 or more years (excluding occasional break-ins) which result in repairs or replacements.
  • Your vehicle is a convertible.
  • The value of the vehicle exceeds $65,000.
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