Replacement insurance (FPQ 5)
Should I opt for full replacement cost coverage with my insurance broker or the replacement package offered by my car dealer?
This is one of our most often asked questions! Both options can be interesting depending on your specific situation when buying or leasing a vehicle. What we tell our clients, however, is to first talk to their insurance broker since he is the real insurance specialist, rather than with the car dealership’s commercial director who is a car financing specialist. In Quebec, insurance brokers are governed by the Autorité des marchés financiers and must conform to a professional code of ethics.
Many factors must be taken into account when you are considering this type of coverage, notably the vehicle’s financing period, your driving record, the number and cost of insurance reclamations you have made. Full replacement cost protection is usually less expensive than replacement insurance. Since prices increases yearly, it might be wise to opt for a replacement insurance plan if you have made several reclamations in the past and your insurer might not grant you the full replacement value package, or if another reclamation could make you lose this package. The important thing is to take the time to ponder these two options, but most importantly, to discuss them with your insurance broker since he is the one you will be dealing with in case of loss.
Inquire about replacement insurance with your broker. He might be able to offer you a substantial rebate on your insurance premium which is something that your car dealer cannot offer.