What does Loss of Use mean in car insurance?

A woman using a cellphone beside a broken-down car on the side of the road.

Accidents happen and if you rely on your car every day, you might be wondering if your car insurance has you covered for alternative means of transportation (such as a car rental, public transportation or a taxi) should something happen to your car. Car insurance requirements vary by province and territory, so review your policy to determine if you have coverage for alternative means of transportation in the event of Loss of Use to your car. If needed, there are optional coverages you can purchase for more protection. For situations such as this, purchasing additional coverage for Loss of Use (also known as Coverage for Transportation Replacement) can help keep you moving while your car is getting repaired in the event of a total loss from a covered claim.

Tips and limitations to Loss of Use car insurance coverage

When buying additional coverage for Loss of Use, you can choose the coverage amount you want. This is the amount the insurance will pay up to for the cost of a rental, public transportation or taxi in the event of a covered claim. It’s important to remember to have enough coverage for your needs. Let’s say renting an SUV in Canada costs an average of $100 per day, plus tax. An insurance policy with a $1,000 coverage amount for Loss of Use will cover rental costs for about 8 days. With costs of alternative means of transportation rising and possible delays with repairs, it’s important to connect with your insurance representative to ensure you have enough coverage to help with these expenses for extended periods of time should something unexpected happen.

Things to consider when selecting your coverage amount:

  • Type of vehicle you own (year, make, model)
  • Do you have another vehicle to drive should something happen to your primary vehicle?
  • Do you rely on your primary vehicle for daily activities such as work, childcare, errands etc.?
  • Exchange rates will apply if the vehicle is rented in the U.S. while you’re travelling (your coverage amounts are in Canadian dollars)

Differences between coverage for Loss of Use and Liability for Damage to Non-Owned Automobiles

Loss of Use is often confused with Liability for Damage to Non-Owned Automobiles. Both are optional coverages you can buy and add to your car insurance policy for different situations.

Loss of Use helps cover the costs of temporary vehicle replacement (such as a car rental, public transportation or taxi) while your vehicle is being repaired or after a total loss due to a covered claim. Keep in mind, if you decide on a rental, Loss of Use would typically reimburse you for renting a similar car to the one you own.

Liability for Damage to Non-Owned Automobiles provides coverage for loss or damage if you’re driving a vehicle you don’t own. For example, if you rent cars occasionally to go around town or while on vacation within Canada or the Continental U.S. including Hawaii and Alaska, this optional add-on coverage might be right for you.

Car insurance coverage isn’t one-size-fits-all. Your coverage needs may be different from someone else’. Speak to your insurance representative to see which optional coverages are right for you.

The content on this page is for information purposes only and is not intended to be relied upon as professional or expert advice. The insurance products described herein are subject to terms, conditions, restrictions and exclusions, which are outlined in our final policy wording. Please speak with your Aviva insurance representative if you would like to learn more including whether these insurance products are available in your province or territory. Insurance products are underwritten by insurers in the Aviva Canada group of insurance companies, which are subsidiaries of Aviva Canada Inc. Aviva and the Aviva logo are trademarks used under license from the licensor.