If your financed vehicle is declared a total loss (e.g., after an accident or theft), the insurer typically pays out the vehicle’s Actual Cash Value—which may be less than your remaining loan balance due to depreciation.

This can leave you responsible for the difference.

• The Problem: You may still owe money to the lender if the payout doesn’t fully cover your loan.

• Solution: Endorsements

• An example is the Waiver of Depreciation (OPCF 43 in Ontario). It can help ensure you receive a higher settlement on newer vehicles (usually within the first 24 months), reducing or eliminating any gap between what you owe and what the car is deemed to be worth.

This coverage is only available for newly financed or leased vehicles fresh off the lot.

Always review your financing agreement and insurance policy to see if an endorsement like OPCF 43 or another “gap coverage” option applies to your situation. This ensures you’re not left with an unexpected bill if your vehicle is a total loss.