FAQ

Frequently asked questions about specialty car insurance in Ontario:

Q: Is there a difference between a specialty vehicle policy and the policy on my usual car?

A: Yes … The specialty car policy is designed for cars owned by hobbyists. Certain rules apply that are different than your standard policy and some of the clauses in the policy are different.

Q: Is specialty vehicle insurance the same all across Canada?

A: For the most part yes. There are some differences province to province as all insurance policies are governed by the rules set down by the Insurance Act in each province. This can lead to slightly different coverage clauses and differing basic deductibles.

Q: Can I put specialty car insurance on my car and use it daily?

A: No … most specialty policies will have either mileage limits per year or clauses that state the car is only to be used for trips to and from automotive events, test drives and only if being driven by the policy holder or another named driver on the policy.  Most insurers now require that along with your specialty car you show ownership of a licensed and insured daily driver.

Q: My insurance broker mentioned endorsements on my policy. What are they?

A: Endorsements are clauses in your insurance which determine what your car is covered for. They are set out by the province in the Insurance Act. These cover such things as how the value of your car will be calculated should you have an accident and what additional things over the basic insurance policy you will be covered for.

Q: If I should have an accident how much will I get paid?

A: That is a question that depends on the type of policy and the endorsement clauses that are in your policy. Generally an appraisal of the damage will be done by the insurance company. If this appraisal comes to a figure that is less than 70% to 80% of the value of the vehicle the vehicle is deemed repairable. If that figure is more than that amount the car will be deemed a total loss. Generally this amount will be paid directly to the repair shop less the amount of your deductible. Arrangements can be made to pay this repair figure directly to you and you can make the arrangements to pay the repair shop. Caution should be taken her though as if unseen damage is found the insurance company may not reimburse you for this additional cost as you chose to settle for a given amount in the settlement.

Q: How is the value of my vehicle figured out?

A: Some insurers have developed their own value calculation databases or will allow you to set the amount of the coverage value. Other insurers will require that you have a professional appraiser complete an inspection and document the value of the vehicle before insuring it. There are many items that are involved in this type of appraisal which I will cover in another article. Either way the premium you pay will be based on this value along with the standard variables such as your driving record, how long you have been driving, where you live and other factors.

Q: Why do I have to pay a deductible and when do I pay it?

A: Deductibles were first applied to insurance policies by companies in order to discourage frivolous claims for damage. Insurers figured that if the client had some form of responsibility then they would not be claiming for just any reason. This is why when you are at fault you pay a deductible but that deductible can be waived if you are not at fault and your company is representing you when it is the fault of someone else. This can vary if the other party is unknown, has done something to violate their coverage or does not have coverage that will cover them. For this reason you are expected in most cases to pay the first portion of the cost. Most repair shops will work with you and collect this amount when the job is completed but it should be remembered that the repair shop has the right to ask for this amount up front before beginning repairs. This sometimes happens as they want to make sure they get paid for at least a portion of their parts and materials.

Q: Who gets to decide who fixes my car?

A: In Ontario you have the right to choose the repair shop that will fix your vehicle. Caution should be taken here though as there are several questions to ask yourself. Is the shop that fixes your daily driver the best choice for your specialty vehicle? Do they have the staff with the skill and knowledge to do the repair? Do they have access to the parts and information they will need to repair it? All these things are important to consider as older or modified vehicles are far different to repair than the average daily driver. Ask others that you know with specialty vehicles that have had them repaired for advice and recommendations. The most dangerous thing here is someone who has never had a vehicle repaired or is giving you advice on what happened to them 10 years ago when they had their daily driver repaired. Also remember that repairing a specialty vehicle is usually a longer process than repairing your daily driver due to waiting for parts, parts availability and having to source information etc.

Q: If my car is deemed to be a total loss do I keep the vehicle?

A: Did you put a clause in the policy to give you this option? If you did not then the vehicle will automatically become the property of the insurance company when they pay you for it. You can put a clause in your insurance to give you the option to keep the vehicle. If you do keep the vehicle your insurer will calculate the value of the vehicle based on whether you have a declared value policy or one that pays “average cash value”. The insurance company will then make a deduction of any applicable deductible and what they would get on average for the salvage value of the vehicle. It must be kept in mind that under Ontario law the insurance company does have the right to brand the vehicle and it if that is the case it should be discussed as to whether this brand would be “salvage” or “irrepairable”.

Q: If my car is repairable and I want cash for the repair can I do this?

A: Yes … but be prepared to get paid less than the full repair cost and to have to prove that the vehicle was properly repaired before the company will reinsure it. Insurance law states that you are not entitled to make a profit on the repair of your own vehicle so therefore they will make a deduction on the value of the labor if you are repairing your own vehicle and pay only what would be the equivalent of the wages you would get if were you the technician repairing the vehicle. They also have the right to demand that you have the vehicle inspected to make sure that the repairs were made to professional standards and that the repaired vehicle meets all safety standards.