Marketing Showcase > Replacement Insurance:

Replacement Insurance:

posted on December 16, 2015

An opportunity to showcase your advisory role

By Intact Insurance Company

Is a customer calling about insurance for his or her new vehicle? After offering your congratulations, you’ll take the time to put together the right combination of insurance for them. But don’t miss the opportunity to take your role as an advisor a step further: tell them about Replacement Insurance. The client is sure to appreciate your taking the trouble to offer this reassuring solution.


An excellent complement to auto insurance
Customers will be more confident knowing they can count on this additional protection, sold separately as excess coverage over the primary auto insurance policy, to pay their claim without regard to a vehicle’s depreciation.

 You can offer Replacement Insurance to almost all your customers: it’s available not only for new vehicles and demonstrators[1], but also for used vehicles, and not only for purchases but also for leases. What’s more, Replacement Insurance can cover recreational vehicles, including motorcycles, ATVs, snowmobiles and motorhomes.

Valuable protection for your customer’s investment
Here are some of the advantages you can bring up to explain the value of a Replacement Insurance policy for your customers:

  • In the event of total loss of a new vehicle, including theft, they can replace it with a new vehicle of the current model year with the same specifications, equipment and accessories, either from the original dealer or any dealer they choose, depending on which option they select on their contract.
  • They can receive an indemnity for the difference between the claim payment under the primary insurance policy and the value established for the replacement vehicle.
  • They can receive a refund of their deductible, up to $2,500 in case of total loss and up to $250 for partial damage claims (even broken windshields).
  • In the event of partial loss of a new vehicle, non-repairable damaged parts are replaced with new original equipment manufacturer (OEM) parts.
  • Coverage may be cancelled at any time and the premium refund is prorated for the number of days remaining in the term.
  • Coverage of up to $75 per day (maximum $2,250 per occurrence) for a courtesy car.

When it comes to convincing your customer, be ready to mention these points as well:

  • As a licenced damage insurance professional, you are in the best position to inform and advise them about this protection;
  • The Replacement Insurance premium is locked in for the entire term of the contract, which can range up to seven years for cars and five years for recreational vehicles;
  • If they purchase both their primary auto insurance policy and Replacement Insurance from you, then you will be the only person they need to contact if they have a claim.

Comparison with the replacement cost endorsement, Q.E.F. No. 43A-E
There is another type of replacement cost coverage: QEF 43 – Change to Loss Payment. Here are some advantages of a Replacement Insurance policy as compared with the endorsement:

  • The Replacement Insurance premium is a set amount for the entire term of the policy, which can be as much as seven years. This protects your customer from rate increases.
  • Replacement Insurance is available for new and used automobiles and demonstrators1, whereas the replacement cost endorsement is limited to new vehicles.
  • Replacement Insurance is not subject to an insured’s claims record.

 More economical than the car dealer’s product
“The product costs more if you buy it from the car dealer.” That’s a quote from the superintendent of solvency at the Autorité des marchés financiers, in an article published in the Journal de l’assurance in May of 2014.  This in itself is an excellent reason to give your customers for buying Replacement Insurance from you. 

Offer your customers a solution that provides replacement cost coverage when there’s a claim, no matter how much their vehicle has depreciated in value. It’s a great way to reinforce your relationship with customers. Don’t miss out!

Replacement Insurance underwritten by Intact Insurance is offered through CIME Cabinet d’assurances inc. Certain conditions, limitations and exclusions apply.

 [1] Demo vehicles with no more than 15,000 km on the odometer are considered new for purposes of Replacement Insurance.