When you drive a new vehicle off the lot, depreciation starts immediately. For many Ontario drivers, this only becomes apparent after a total loss, when the insurance payout doesn’t reflect what it would actually cost to replace that vehicle today.

To help close that gap, Merit Insurance offers Optiom Prime Vehicle Replacement coverage as an add-on policy. This additional protection works alongside your standard auto insurance and is designed to safeguard you from depreciation, market volatility, and unexpected financial shortfalls.

What Is Vehicle Replacement Coverage?

Most standard auto insurance policies pay the actual cash value of your vehicle at the time of a total loss. That value reflects depreciation, mileage, and market conditions, not what you originally paid or what it costs to replace the vehicle today.

Vehicle replacement coverage is designed to help bridge that gap. Depending on the coverage selected, it may allow you to:

• Replace your vehicle with a brand-new equivalent model
• Receive the original purchase price or a protected value instead of the depreciated market value
• Avoid being left with loan or lease payments after a write-off

This type of coverage is especially valuable during the first several years of ownership, when depreciation is at its steepest and vehicle prices can fluctuate significantly.

How Optiom Prime Vehicle Replacement Works

For New Vehicles

If your new vehicle is declared a total loss, Optiom Prime can pay the difference between your insurer’s settlement and the MSRP of a new, equivalent replacement vehicle.

• Up to $80,000 over your primary insurer’s payout
• Up to 84 months of price protection

If your vehicle is repairable, Optiom Prime can also help cover new OEM (Original Equipment Manufacturer) parts, helping preserve your vehicle’s integrity and value.

For Used Vehicles

Optiom Prime also applies to used vehicles, protecting against depreciation after purchase.

• Covers the difference between the vehicle’s market value at the time of loss and its value when the policy started
• Up to $60,000 in protection
• Up to 60 months of price protection

An optional feature can increase your vehicle’s insured value by 5% per year, helping offset appreciation or market shifts.

Additional Benefits That Can Make a Difference

Optiom Prime Vehicle Replacement can also include practical extras that many drivers don’t realize they’ll need until they do, such as:

• Deductible reimbursement (up to $500)
• Rental vehicle reimbursement if repairs take longer than expected
• Key fob replacement coverage
• Coverage for diminished vehicle value after certain no-fault accidents

Coverage is available for vehicles up to 10 years old, with fixed premiums during the policy term. Eligibility is broad, as long as you carry collision and comprehensive coverage on your primary auto policy.

How Merit Helps

At Merit Insurance, we don’t just offer coverage, we explain it. We help you understand how Optiom Prime Vehicle Replacement fits with your existing policy, what timelines apply, and whether the protection aligns with your vehicle, budget, and driving habits.

If you’re buying a vehicle, renewing your auto insurance, or simply want to understand what would happen in a total-loss scenario, your broker is here to walk through the details with you, before you ever need to make a claim. That’s what we call The Merit Difference.