[Forzanerazzurri]

Originally Posted by FCRMonty

Crazy - if I total my car in the first 4 years of ownership, my insurer will pay the lowest of: 1) the actual purchase price; 2) manufacturer’s suggested retail price at the time of purchase; or 3) the cost of replacing my car with a new car of the same make or model (also includes taxes). Pretty standard coverage in Ontario.

Yep. And it's required by lots of banks especially now that people seem to put nothing down and there would be a pretty large spread between what you owe and what the car is worth for most people in the event their year old car is written off.

[BryanCO]

Originally Posted by FCRMonty

Crazy - if I total my car in the first 4 years of ownership, my insurer will pay the lowest of: 1) the actual purchase price; 2) manufacturer’s suggested retail price at the time of purchase; or 3) the cost of replacing my car with a new car of the same make or model (also includes taxes). Pretty standard coverage in Ontario.

Interesting. Do you have a choice for this type of coverage? Not sure why someone would want to pay for insurance above the value of the item being insured? Especially for a low risk (total loss) event.

[Forzanerazzurri]

Originally Posted by BryanCO

Interesting. Do you have a choice for this type of coverage? Not sure why someone would want to pay for insurance above the value of the item being insured? Especially for a low risk (total loss) event.

You want it as a bridge for the initial depreciation on most cars the second you drive it off the lot, especially if you put nothing down. Its optional for most people unless their lender requires it and it's relatively inexpensive for the first year or two of ownership. My car is 6 months old and I think I pay $50 bucks a year for it. You can make your own judgement but it's a no brainier for me.

[BryanCO]

Originally Posted by Forzanerazzurri

You want it as a bridge for the initial depreciation on most cars the second you drive it off the lot, especially if you put nothing down. Its optional for most people unless their lender requires it and it's relatively inexpensive for the first year or two of ownership. My car is 6 months old and I think I pay $50 bucks a year for it. You can make your own judgement but it's a no brainier for me.

Ya, I understand and can see some value in certain circumstances but in normal times when depreciation is occurring, you end up paying for the coverage above what the car is worth. Risk and potential payout (above the vehicle value) is low when the vehicle is new so the cost is low.

I’m not even sure that type of coverage is available in the US. Agreed Value is kind of like that but my experience is that insurance companies want an appraisal and will not insure for greater than the underlying vehicle value. Anyway, interesting option.