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The following information was very generously provided by Bruce C. Farrow of Road/Show Appraisals.  Many car clubs have their own appraisers (recognized by insurance companies and the MTO - like ACCCC and HASC) but please feel free to contact Bruce for an appraisal as well.


Frequently Asked Questions

Q.. What is the difference between an insurance agent and an insurance broker?

A. An insurance agent works directly for only one insurance underwriter as an employee. A broker can normally offer different insurance products from a variety of underwriters. In the event of a claim, the broker will usually offer more assistance to the consumer.


Q. What is a “waiver of depreciation?”

A. If you are the first owner of a brand-new car, you may purchase this waiver from the insurance carrier for a nominal fee. Depending on the carrier, the waiver usually applies for a maximum of 30 months and means that, in the case of a total loss, you will be paid out the original purchase price of the car. If you don’t have this waiver, and if you have a total loss, you would be paid out only the depreciated value of the car. This could result in a serious financial loss to you.


If your car is not covered by a waiver of depreciation because you are not the original owner, or the car is over 30 months old, it is recommended that you have an insurance policy with an OEF 19 or 19A endorsement so that your investment is protected.

Q. What is the difference between an OEF 19 and an OEF 19A insurance policy endorsement?

A. The OEF 19 endorsement limits the liability of the underwriter to not exceed the stated value. The 19A is the agreed value that the underwriter will pay out (in most cases) in case of a total loss, or to be used as a basis when determining whether the car is written off or not. The 19A is considered superior protection for the consumer, but not all underwriters will offer it. The 19 is considered “better than nothing” since it can be used as starting point if one has to go to insurance mediation.


Q.. What happens if I don’t have a waiver of depreciation, an OEF 19, or an OEF 19A?

A. In the event of a total loss or when determining whether the car is written off or not, the underwriter will offer you ACV, which means Actual Cash Value. This is not to the advantage of the consumer since the ACV usually is significantly less than the replacement value of the car.


Q.. How does the insurance mediation system work?

A. In the case of a total loss, you may request mediation if you are not satisfied with the financial offer from the insurance company. You first have your “post collision” vehicle appraised by your own appraiser, at your cost. Then a neutral third party licensed appraiser, agreed to in advance by both the underwriter and consumer, makes an independent appraisal of value in consideration of documentation submitted by both parties. This value is usually used as the basis of a settlement.


Q.. What is the difference between a licensed appraiser and an unlicensed one?

A. There are only about 20 licensed appraisers in Ontario that meet the high standards set by the insurance underwriters. I am one of them and have had more than 25 years experience in insurance appraisals, mediation, and as an expert witness. “Professional Association of Vehicle Appraisers” appraisers are on the “approved list” with all underwriters, are covered by errors and omissions insurance, as well as normal business insurance. Their license is subject to annual peer review. An unlicensed appraiser is any individual who may call themselves an appraiser. They may produce incompetent or inaccurate reports, or they may even do good work. There is no way of knowing. Licensed appraisers are listed at www.trustpave.com.


Q. I have had an unlicensed appraiser provide an appraisal of my car and it has been accepted by the insurance agent or broker. Isn’t this enough?

A. Agents or brokers don’t “accept” reports. The broker or agent may have seen the appraisal report, possibly skimmed it, and filed it away. However, if you make a claim for a total loss, then the claims department of the underwriter will not accept the appraisal report on face value. Even with a 19A endorsement on the policy there is sufficient legal fine print “wiggle room” for the insurance underwriter to pay out far less than the agreed value if the appraisal report is fraudulent, or inaccurate.


Q. What is the limit on claims for audio gear?

A. The claim limit was recently lowered from $3.5K to $1.5K. This means that you will be paid a maximum of $1.5K for audio/radio equipment that is stolen/total loss, regardless of receipts for more $ value. High value audio gear can be separately appraised and the value attached as a rider to your policy.


Q. What does the principle of “full disclosure” mean?

A. If one does not disclose the “use” and “nature” of your vehicle, any subsequent claim can be denied. For example if your policy states the use of the vehicle is for “pleasure” only, you may be denied coverage if an investigation reveals that you have been using the vehicle for commuting to work on a regular basis. Similarly, if your vehicle has changed in “nature.” Things like (for example) replacing a 4-cylinder engine with a 6-cylinder engine, or a 3-litre engine with a 3.6 litre engine must be reported in writing to the insurance underwriter. Then they may be able to place the vehicle in the appropriate rate group. A new custom steering wheel or monogrammed carpets don’t change the nature of the vehicle.


Q. What is new in the insurance business in Ontario?

A. Insurance underwriters are in tough financial times so it is more important than ever to play by the rules when dealing with them. For example, it is now common practice to cancel a policy if a payment is late by even one day. Then, if you want to renew the policy the increase may be up to $3 thousand. It is now common practice to require yearly mechanical fitness certificates for all vehicles more than 15 years old and this may soon be reduced to 10 years old. Claims are being denied for cars with nitrous oxide systems, engine swaps and gross suspension changes, far more frequently now than even two years ago.


Disclaimer: This information was current as of March 2004 and may be subject to change at any time.

This information was originally located at: Road/Show Appraisals