Latest news with #gapinsurance
Globe and Mail
06-07-2025
- Automotive
- Globe and Mail
What's new vehicle protection insurance and do I need it for five years if I have a two-year lease?
Our car insurance is getting more expensive and we are looking to cut costs. We have a two-year lease on a car but see in our policy that we are paying for new vehicle protection for five years. What does that mean and is that necessary with such a short lease? Could we opt out or choose a shorter timeline? – Jessica, Toronto Depreciation protection from your insurance company can keep you from owing money if your leased car is written off in a crash – but check that your lease doesn't already include coverage, an expert said. 'Lease agreements normally [already] come with gap insurance, which protects the purchaser in the event of a serious collision when the vehicle is written off by the insurance company,' said Shari Prymak, a senior consultant with Car Help Canada, a Toronto-based not-for-profit that helps drivers find cars and negotiate purchase agreements. 'If the value of the vehicle happens to be lower than the balance of the lease, then the gap insurance is there to make up the difference, so the vehicle owner is not on the hook for it.' At the risk of over-simplifying, you can buy gap insurance from the manufacturer or dealer, and you buy depreciation protection, also known as new vehicle protection – in Ontario, it's called OPCF 43, but there are versions in all provinces – from your insurance company. They both are designed to protect you from depreciation if your car is totalled in a crash or stolen. Without them, your insurance company will pay out what your car is worth at the time of the crash or theft – and typically, that's a lot less than what you paid for it originally, Prymak said. So, if you lease or have a car loan, for instance, that means you could owe the finance company the difference. But gap insurance and depreciation protection guarantee that the payoff will be the amount you paid for your vehicle. 'So, [for a financed vehicle, for example] if the vehicle's market value is now $25,000, but the owner still owes $30,000 on the loan, it's on them to pay off the lien to make up that difference if they don't have gap coverage,' he said. Mind the gap? Typically, gap insurance costs around $1,000 and you must buy it when the car is new, Prymak said. 'I've seen dealers charge up to $3,000,' he said, adding that financed vehicles don't automatically come with gap insurance, although you can choose to buy it. 'I don't know if it's a requirement of leases to have gap, but I don't believe I've seen a lease agreement that doesn't have it. It's just common practice.' We asked a few car companies about whether they include gap insurance in their leases and what it covers. We didn't get immediate answers. Depreciation protection through an insurance company is an endorsement you add on to your insurance policy when you buy or lease a brand new vehicle or a demo with less than 5,000 kilometres on it. Like gap insurance, you can't add it later. It's available for between two and five years and typically costs roughly $100 a year, or often less, said Traci Boland, a London, Ont.-based insurance broker and chair of the Insurance Brokers Association of Canada. 'Everybody who buys or leases a new vehicle should have OPCF 43,' she said. 'I have it for five years on my Jeep Wrangler and I'm in year three. If my vehicle is stolen, I get the bill of sale price for it.' Generally, the length of the coverage depends on your insurance company – some companies only offer two-year OPCF 43 coverage, for instance, and others only offer five-year coverage. So, to change from five-year coverage to two-year coverage, for instance, you may have to change insurance companies. The annual cost for OPCF 43 would probably still be similar, she said. While you can cancel OPCF 43 entirely to save a little money, Boland and other brokers we spoke to don't recommend it. Instead, they suggest doing the math to see how much you're saving by skipping it. 'On a brand new vehicle, it's $100 a year,' said Debbie Arnold, a Toronto-based insurance broker. 'I would make a client sign in blood if they don't want to take [OPCF 43] because when there's a claim settlement, the client is not going to be happy if they don't get at least the bill of sale value.' It's important to understand that OPCF 43 doesn't pay you the cost to replace your vehicle with a brand new one – it just gives you the amount on the original bill of sale, Arnold said. But at least one company sells replacement cost coverage, separate from OPCF 43, that will give you the price of a brand new car. 'So if you purchase a 2024 [Hyundai] Tucson and you paid $50,000 for it in 2024,' Arnold said, 'if you have replacement cost coverage, then when there's a total loss in 2026, it's putting you into a 2026 vehicle [which might cost significantly more].' While Prymak said you shouldn't need OPCF 43 if your lease includes gap coverage, Boland recommends checking the wording of the dealer's gap insurance policy carefully. But there are also benefits to having both gap insurance and OPCF 43. For instance, if you decide to buy your car at the end of your two-year lease but have OPCF 43 for five years, you would still be covered against depreciation for three more years, the Insurance Bureau of Canada said in an e-mail. Crash course? If your lease includes gap insurance or if you have OPCF 43, you walk away from the lease if your car is totalled or stolen, Prymak said. 'So if the vehicle is written off, the insurance company will pay out the lease. That'll be between your insurance company and the financial company that's carrying the lease,' he said. 'Then you're essentially back to square one, and you have to purchase or lease a new vehicle.' But if you made a down payment at the start of the lease so your monthly payments would be lower, you'll lose it. 'The insurance company is not responsible for compensating you on that down payment. They're just responsible for paying off your lease,' he said. 'So it's not a good idea to make a large down payment on a lease. It doesn't benefit you financially in any way.' A better idea? Many car companies let you put down a security deposit in exchange for a lower interest rate, he said. 'So you get lower payments and then that security deposit is returned to you at the end of the lease when you bring back the vehicle,' he said. Have a driving question? Send it to globedrive@ and put 'Driving Concerns' in your subject line. Emails without the correct subject line may not be answered. Canada's a big place, so let us know where you are so we can find the answer for your city and province.
Yahoo
08-06-2025
- Automotive
- Yahoo
Deer collision leads to insurance nightmare for N.B. woman
As Samantha Anderson headed home to Sunny Corner after Christmas supper in Miramichi last December, a deer jumped in front of her car on a blind hill. All she could do was brace for impact and tell her daughter to do the same. "We've never been in a car accident, so it was petrifying for us," Anderson said. She came to a stop on the opposite side of Route 425, then made sure her eight-year-old daughter was OK. The car was heavily damaged, so Anderson called police and started clearing up debris scattered across the road. What followed was a months-long dispute with an insurance company that has opened the eyes of the single mother, who hopes sharing her tale might help others. Her main lesson: Pay closer attention to what you're signing, do some homework, ask more questions. Anderson said the claim on her regular, required insurance policy was settled within a week after her car was totalled. But she'd also bought a policy, called gap insurance, after being offered it by the dealership where she bought her car. Trying to get that claim approved has been such a struggle, she said, she's now on the verge of filing for bankruptcy. Although she admits she could have been more careful when she bought the policy, her case also raises a question about who gets to sell such insurance. New Brunswick officials say more than 100 dealerships in this province are allowed to sell gap insurance. But across the country in British Columbia, dealerships are forbidden from selling it, because that province feels they're not qualified. Anderson bought the gap policy from an Ontario company called Assureway Protection Corporation at Kaat Auto in Rogersville, which sold her the car, a Mitsubishi RVR, in January 2024. WATCH | 'I've cried through email because they won't answer the phone': The policy was pitched as an option that would provide peace of mind because of the money she'd borrowed to buy the car. If a vehicle is totalled, gap insurance can cover money still owed on a car loan beyond the depreciated value that's covered by the regular insurance policy. Anderson is a social worker for a non-profit and needs a car in her work. She described her Mitsubish as her "dream car," and she wanted to be sure she was covered. But she admitted she did not do much research into the gap policy or the company selling it. "I guess that could be on me," she said. CBC News spoke with Roland Gauvin of Kaat Auto, who said the dealership no longer sells insurance products from Assureway because of problems that employees and customers had getting answers. "I only sell the product," Gauvin when asked if Kaat was responsible for Anderson's troubles. "I'm not responsible." Trying to deal with Assureway was not easy for Anderson. When she called, she was told to make her claim online and was immediately hung up on. On March 13, she received a letter from Assureway saying there were "certain inconsistencies" in her claim, but it provided no details. Five days later, an unidentified Assureway agent asked in an email for photos of the dead deer. Anderson had already sent the company photos of her car in the wrecking yard, with deer hair visible on the vehicle. An insurance company seeking proof of an accident also has access to an accident report, according to RCMP Sgt. Jason LeBlanc. He confirmed police received a call about a deer collision in Strathadam on Dec. 27, but said officers weren't dispatched to the scene because no one was injured and no other vehicles were involved. A staff member did take details of the collision over the phone to complete a report. Emails Anderson sent to Assureway show she's reached out at least 15 times for updates. "I've begged them. I've cried through email because they won't answer the phone." More than five months after the accident, there is still no resolution. "I'm a single mom with three children trying to get by, trying to make a living. I have a really good job, but it needs a car." The gap policy cost Anderson $2,500 for a seven-year term. The car's sticker price was $38,000, but a previous car loan she was still paying off brought the bill up to $48,000, which is what the gap policy was to cover if necessary. Anderson said her main insurance policy paid off about $19,000 after the crash, so she's waiting for the rest to come through from Assureway. "I"m so tired of trying to pry and pry and pry," she said. "Lawyer fees are too expensive and I'm still paying a car payment for a car that's no longer here." CBC News requested an interview with Assureway but received a brief email from an unnamed employee several days later instead. "We have found the claim questionable on several grounds due to irregularities in the claim thus its investigation status," the statement said. "Our investigation is currently underway. [Anderson] is fully aware of this status." The irregularities weren't identified in the email, which went on to say the company would not discuss the matter further for privacy reasons. The day that CBC News tried to talk to Assureway, Anderson got an email from the company for the first time in several weeks. "We are still conducting our investigation. We will update you as soon as possible," the email said. While Anderson wishes she'd asked more questions about the gap policy, there's a public office in New Brunswick just for that purpose. Michèle Pelletier, the New Brunswick consumer advocate for Insurance, said that since 2005, her Bathurst office has fielded about 1,200 calls annually from New Brunswickers with insurance questions. She and her staff answer for free. "There's no silly questions," she said. The office can also be a link between consumers and insurance companies, she said, reaching out to companies directly when consumers aren't getting answers. Pelletier said her office rarely gets questions about gap insurance, but that it's always important for people to read the fine print and ask questions. "It's the language," she said of some policies. "It's not plain language sometimes." Insurance in New Brunswick is regulated by the Financial and Consumer Services Commission, which licenses any dealerships who distribute insurance products, as well as insurers who underwrite the policies. "We've set those in place to protect New Brunswickers. So it's not just anybody that can hang a shingle and say they'll sell insurance," said commission spokesperson Marissa Sollows. The commission confirmed that Assureway is classified as a third-party administrator, which Sollows described as a service provider that goes between a dealership and the actual insurance company underwriting the policy. "And in the event of a claim, the third-party administrator would do the administrative work," she said, adding that paperwork would show a customer the insurance company underwriting the policy. Third-party administrators are not regulated by the commission, Sollows said, but dealerships that offer insurance products such as gap insurance do have to be licensed. The commission confirmed Kaat Auto is licensed to sell insurance. When asked if the fact that third-party administrators are not regulated sets up a loophole for consumers to be exploited, Sollows declined to answer. In an email statement, another commission spokesperson, Morgan Daye, said consumers who purchase from third-party administrators still have potential recourse through the commission. "The Commission has the power to intervene with both the underwriting insurer and with the representative selling the product," Daye wrote. Daye also confirmed that 127 dealerships in New Brunswick are licensed to sell gap insurance. Nowhere on Assureway's website does it say the company is a third-party administrator. Nor is there a mention of another insurance company underwriting the policies. "No smoke & mirrors … just true coverage that SIMPLY WORKS!" the website says. While Anderson is waiting for a decision from Assureway, if she had lived in British Columbia, its rules would have saved her from the situation she faces in New Brunswick. Melinda Lau, a spokesperson for the Insurance Council of British Columbia, confirmed the province has not allowed car dealerships to sell gap insurance since 2017. "GAP products are considered complex insurance products and must be sold by a qualified, fully licensed general insurance agent," Lau wrote in an email statement. Dealerships are only eligible for insurance licences that are "limited in scope" and don't have the same educational requirements as full insurance licences, she said. "The Insurance Council is of the view that it would not be in the public interest for dealerships with limited licences to offer complex insurance products to consumers." Lau went on to say that B.C. does not issue full insurance licences to car dealerships because it could "present a potential conflict of interest." CBC News has asked the New Brunswick Department of Finance, which oversees insurance, whether the province would consider a similar policy as British Columbia. The department directed questions back to the commission. Spokesperson Morgan Daye said the province recently updated requirements for car dealerships selling insurance, requiring them to be "knowledgeable and provide sufficient information to help consumers make informed decisions."
CBC
06-06-2025
- Automotive
- CBC
Deer collision leads to insurance nightmare for N.B. woman
Social Sharing As Samantha Anderson headed home to Sunny Corner after Christmas supper in Miramichi last December, a deer jumped in front of her car on a blind hill. All she could do was brace for impact and tell her daughter to do the same. "We've never been in a car accident, so it was petrifying for us," Anderson said. She came to a stop on the opposite side of Route 425, then made sure her eight-year-old daughter was OK. The car was heavily damaged, so Anderson called police and started clearing up debris scattered across the road. What followed was a months-long dispute with an insurance company that has opened the eyes of the single mother, who hopes sharing her tale might help others. Her main lesson: Pay closer attention to what you're signing, do some homework, ask more questions. Signed on for gap insurance Anderson said the claim on her regular, required insurance policy was settled within a week after her car was totalled. But she'd also bought a policy, called gap insurance, after being offered it by the dealership where she bought her car. Trying to get that claim approved has been such a struggle, she said, she's now on the verge of filing for bankruptcy. Although she admits she could have been more careful when she bought the policy, her case also raises a question about who gets to sell such insurance. New Brunswick officials say more than 100 dealerships in this province are allowed to sell gap insurance. But across the country in British Columbia, dealerships are forbidden from selling it, because that province feels they're not qualified. Anderson bought the gap policy from an Ontario company called Assureway Protection Corporation at Kaat Auto in Rogersville, which sold her the car, a Mitsubishi RVR, in January 2024. WATCH | 'I've cried through email because they won't answer the phone': Months of insurance uncertainty after woman totals car in deer crash 3 hours ago Duration 4:24 The policy was pitched as an option that would provide peace of mind because of the money she'd borrowed to buy the car. If a vehicle is totalled, gap insurance can cover money still owed on a car loan beyond the depreciated value that's covered by the regular insurance policy. Anderson is a social worker for a non-profit and needs a car in her work. She described her Mitsubish as her "dream car," and she wanted to be sure she was covered. But she admitted she did not do much research into the gap policy or the company selling it. "I guess that could be on me," she said. CBC News spoke with Roland Gauvin of Kaat Auto, who said the dealership no longer sells insurance products from Assureway because of problems that employees and customers had getting answers. "I only sell the product," Gauvin when asked if Kaat was responsible for Anderson's troubles. "I'm not responsible." Trying to deal with Assureway was not easy for Anderson. When she called, she was told to make her claim online and was immediately hung up on. On March 13, she received a letter from Assureway saying there were "certain inconsistencies" in her claim, but it provided no details. Five days later, an unidentified Assureway agent asked in an email for photos of the dead deer. Anderson had already sent the company photos of her car in the wrecking yard, with deer hair visible on the vehicle. An insurance company seeking proof of an accident also has access to an accident report, according to RCMP Sgt. Jason LeBlanc. He confirmed police received a call about a deer collision in Strathadam on Dec. 27, but said officers weren't dispatched to the scene because no one was injured and no other vehicles were involved. A staff member did take details of the collision over the phone to complete a report. 'I'm so tired,' Anderson says Emails Anderson sent to Assureway show she's reached out at least 15 times for updates. "I've begged them. I've cried through email because they won't answer the phone." More than five months after the accident, there is still no resolution. "I'm a single mom with three children trying to get by, trying to make a living. I have a really good job, but it needs a car." The gap policy cost Anderson $2,500 for a seven-year term. The car's sticker price was $38,000, but a previous car loan she was still paying off brought the bill up to $48,000, which is what the gap policy was to cover if necessary. Anderson said her main insurance policy paid off about $19,000 after the crash, so she's waiting for the rest to come through from Assureway. "I"m so tired of trying to pry and pry and pry," she said. "Lawyer fees are too expensive and I'm still paying a car payment for a car that's no longer here." CBC News requested an interview with Assureway but received a brief email from an unnamed employee several days later instead. "We have found the claim questionable on several grounds due to irregularities in the claim thus it's investigation status," the statement said. "Our investigation is currently underway. [Anderson] is fully aware of this status." The irregularities weren't identified in the email, which went on to say the company would not discuss the matter further for privacy reasons. The day that CBC News tried to talk to Assureway, Anderson got an email from the company for the first time in several weeks. "We are still conducting our investigation. We will update you as soon as possible," the email said. Advocate wants to answer public's insurance questions While Anderson wishes she'd asked more questions about the gap policy, there's a public office in New Brunswick just for that purpose. Michèle Pelletier, the New Brunswick consumer advocate for Insurance, said that since 2005, her Bathurst office has fielded about 1,200 calls annually from New Brunswickers with insurance questions. She and her staff answer for free. "There's no silly questions," she said. The office can also be a link between consumers and insurance companies, she said, reaching out to companies directly when consumers aren't getting answers. Pelletier said her office rarely gets questions about gap insurance, but that it's always important for people to read the fine print and ask questions. "It's the language," she said of some policies. "It's not plain language sometimes." Assureway not directly regulated by province Insurance in New Brunswick is regulated by the Financial and Consumer Services Commission, which licenses any dealerships who distribute insurance products, as well as insurers who underwrite the policies. "We've set those in place to protect New Brunswickers. So it's not just anybody that can hang a shingle and say they'll sell insurance," said commission spokesperson Melissa Sollows. The commission confirmed that Assureway is classified as a third-party administrator, which Sollows described as a service provider that goes between a dealership and the actual insurance company underwriting the policy. "And in the event of a claim, the third-party administrator would do the administrative work," she said, adding that paperwork would show a customer the insurance company underwriting the policy. Third-party administrators are not regulated by the commission, Sollows said, but dealerships that offer insurance products such as gap insurance do have to be licensed. The commission confirmed Kaat Auto is licensed to sell insurance. When asked if the fact that third-party administrators are not regulated sets up a loophole for consumers to be exploited, Sollows declined to answer. In an email statement, another commission spokesperson, Morgan Daye, said consumers who purchase from third-party administrators still have potential recourse through the commission. "The Commission has the power to intervene with both the underwriting insurer and with the representative selling the product," Daye wrote. Daye also confirmed that 127 dealerships in New Brunswick are licensed to sell gap insurance. Nowhere on Assureway's website does it say the company is a third-party administrator. Nor is there a mention of another insurance company underwriting the policies. "No smoke & mirrors … just true coverage that SIMPLY WORKS!" the website says. B.C. doesn't allow dealerships to sell gap insurance While Anderson is waiting for a decision from Assureway, if she had lived in British Columbia, its rules would have saved her from the situation she faces in New Brunswick. Melinda Lau, a spokesperson for the Insurance Council of British Columbia, confirmed the province has not allowed car dealerships to sell gap insurance since 2017. "GAP products are considered complex insurance products and must be sold by a qualified, fully licensed general insurance agent," Lau wrote in an email statement. Dealerships are only eligible for insurance licences that are "limited in scope" and don't have the same educational requirements as full insurance licences, she said. "The Insurance Council is of the view that it would not be in the public interest for dealerships with limited licences to offer complex insurance products to consumers." Lau went on to say that B.C. does not issue full insurance licences to car dealerships because it could "present a potential conflict of interest." CBC News has asked the New Brunswick Department of Finance, which oversees insurance, whether the province would consider a similar policy as British Columbia.
Yahoo
06-06-2025
- Automotive
- Yahoo
Months of insurance uncertainty after woman totals car in deer crash
A New Brunswick woman is warning car buyers to ask questions before buying gap insurance too. It's intended to cover some of what's still owed on a car loan after an accident, but for Samantha Anderson, it's only been a headache.
