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Need Help to Decide on Optiom's New Vehicle Replacement Insurance

Discussion in 'Canada' started by hiphenry, Jun 1, 2015.

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Should I buy "New Vehicle Replace" Insurance?

  1. Yes, it's a no-brainer to pay $5k now for $80k down the road

    66.7%
  2. No, it's a scam! Avoid at all costs! The insurers always have a way around it and not pay

    33.3%
  1. hiphenry

    hiphenry Member

    Joined:
    Dec 29, 2014
    Messages:
    16
    Location:
    BC
    Has any one got the Vehicle Replacement insurance from Optiom as opposed to the New Vehicle Replacement Plus from ICBC in British Columbia? I just got my car two weeks ago and I have two more weeks to decide on whether to get the Vehicle Replacement insurance from Optiom (VEHICLE REPLACEMENT PROTECTION PLAN British Columbia | Vehicle Replacement Protection Plan). There are several coverages (quoted off their website):

    • TOTAL LOSS BENEFIT
      • OPTIOM will pay the difference between the depreciated amount you receive from your primary auto insurer and the MSRP of a brand new replacement vehicle:
        • Up to $80,000 depending on the value of your vehicle and the term chosen, in addition to the amount you receive from your primary auto insurer.
    • NEW BODY PARTS REPLACEMENT BENEFIT
      • If your vehicle can be repaired and damages are covered under your primary auto insurance policy, OPTIOM will pay for new O.E.M. genuine replacement body parts:
        • Up to $10,000 per year depending on the value of your vehicle, in addition to the amount you receive from your primary auto insure



    I'll take their example they have (VEHICLE REPLACEMENT PROTECTION PLAN British Columbia | Products - VEHICLE REPLACEMENT PROTECTION PLAN British Columbia) but double the numbers to roughly match the basic Model S so that the car is $80k MSRP today. During year 7 when the MSRP is $96k for a new 2022 Model S, if I had an accident that totaled the car the primary auto insurer (I'm with ICBC) would pay $24k for the vehicle and Optiom would pay $72k. My MSRP is $100k today and say it'll be $120k in year 7, and so the primary insurer would pay $30k but Optiom would max out and pay $80k instead of $87.5k. Minor loss in my opinion compared to the one-time 7-year deal $5k I was quoted for this insurance plan. So it's $5k now for $80k down the road.

    In my mind it seems like a no-brainer deal. Even more so, if the accident is my fault, the insurance would still pay. So I asked the insurance representative if I purposely drove my car into a wall in year 7 and totaled it, would they still pay? His answer was that he has never dealt with this case but so far, in writing, Optiom would still cover it and I would get a new 2022 Model S. New. 2022. Model S. By that time this thing better do 0-60 in 1.1 second and fly like the Jetsons. But of course deep down I feel that the deal is too good to be true and I'm not finding any fine-print. Would they close down and go bankrupt before the 7 years? Better Business Buearu says it's so far an A+. Tell me what's wrong! :redface:
     
  2. Jaff

    Jaff Active Member

    Joined:
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    Messages:
    3,007
    Location:
    Grimsby, Canada
    In Ontario, most companies offer a "waiver of depreciation" endorsement as opposed to a "replacement cost" endorsement...the terms vary from 24 to 48 months from the time the new vehicle is added to the policy...I haven't seen it used much, but when it does come into play, it is the best money you've ever spent...saves thousands in depreciation, especially in high value vehicles...
     
  3. hiphenry

    hiphenry Member

    Joined:
    Dec 29, 2014
    Messages:
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    Location:
    BC
    What is really stopping me to run my car into a wall and get a new car down the road? Other than the inconvenience of paperwork and claim process for me (and the time to wait for the new car), the math doesn't make sense for the insurer.
     
  4. swrving

    swrving Member

    Joined:
    Mar 20, 2015
    Messages:
    92
    Location:
    Campbellville, ON, Canada
    If you drive your car in to a wall down the road, you're insurance rates will at that point go up significantly as you will have an at fault accident on your record. This accident will stay on your record for 7years and you will be paying through the roof for those 7 years if I'm not mistaken.
     
  5. sagaboy

    sagaboy Member

    Joined:
    May 22, 2015
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    Location:
    Canada
    but I have accident forgiveness. Just kidding.
    You'll probably have to do some serious explaining to the cops.
     
  6. swrving

    swrving Member

    Joined:
    Mar 20, 2015
    Messages:
    92
    Location:
    Campbellville, ON, Canada
    Good point about the cops... the insurance company may try to get you charged with Fraud.
     
  7. Jaff

    Jaff Active Member

    Joined:
    Aug 15, 2010
    Messages:
    3,007
    Location:
    Grimsby, Canada
    Actually, it does make financial sense for the insurer...in 32 years, I wouldn't see this endorsement used on a claim more than once / year on average...if you get a new car, and you do not want to add the waiver of depreciation coverage, then you must "sign off", saying you were offered this endorsement but decided not to buy it...think of it as a game of musical chairs...most people with a new car buy this endorsement, even though the odds of using it are low...but, you certainly do not want to be the guy who missed out on saving 50% worth of depreciation on a claim (being the guy without the chair)...when everyone who gets a new car spends the $20-$80 to add this coverage to their policy, there is enough extra premium collected to offset the higher claim settlement the insurer has to pay.

    WRT to "intentional crashing" of your vehicle, many factors can apply such as you being a fatality (not being around to collect), some 3rd party phone videoing the event thus proving your fraud (insurer will pay nothing in this instance), your crash not actually writing off the vehicle (it is still repairable...now you have to explain the repaired vehicle accident when you go to sell it)...of course, there are many more scenarios...






     
  8. PoweredByRain

    PoweredByRain Member

    Joined:
    Jan 5, 2014
    Messages:
    647
    Location:
    Victoria, BC
    I know that the deliberate crashing idea is not intended to be serious, and others have mentioned the fact that the insurer would not pay in the case of fraud, but for completeness you should refer to this:

    http://en.wikibooks.org/wiki/Canadian_Criminal_Sentencing/Offences/Fraud_Over_$5,000

    " liable to a term of imprisonment not exceeding fourteen years"
     
  9. hiphenry

    hiphenry Member

    Joined:
    Dec 29, 2014
    Messages:
    16
    Location:
    BC
    Thanks for the reply. I kinda forgot about the penalty from the primary insurer if it's my fault. I will likely consider getting the insurance coverage.
     

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