Modification to Q.E.F. 43E and Total Losses: New Calculation for Cash Indemnity
If a vehicle is declared a total loss, a new calculation will apply to policyholders who subscribed Endorsement 43E and who wish to avail themselves of the cash indemnity option.
In the event of a total loss, there are several options available to policyholders who subscribed the endorsement 43E. Since the automobile market is constantly evolving, vehicle models and their specifications, equipment and accessories are constantly changing. As a result, it may be more difficult to find the same vehicle at replacement cost.
To facilitate claim settlements, the Autorité des marchés financiers has come up with new solutions in collaboration with the Groupement des assureurs automobiles. Published in December 2024, and effective on January 15, 2025, a new calculation was established for the third indemnity option in cash under Q.E.F. 43E in the event of a total loss.
Q.E.F. 43E – New calculation for Option 3
The new calculation* for the third option of the Q.E.F. 43E of the indemnity in cash reflect the marked-up price paid as follows:
The price paid increased by an annually compounded percentage, calculated in proportion to the number of days elapsed between the date of the vehicle purchase contract and the date of the total loss or total constructive loss.
Price paid: The price charged for the specified vehicle as indicated in the purchase contract, long-term lease or contract of leasing, including its equipment and accessories only.
CPI: Consumer Price Index for Transportation – Institut de la statistique du Québec. If the CPI for the year of the loss is unknown, the CPI from the previous year must be used.
Example
The price paid for the vehicle at the time of purchase was $30,000.
- Purchase agreement date: July 1, 2020
- Date of total loss: September 1, 2023
Including an increase of $4,565.09, the marked-up price paid is $34,565.09.
Indemnity and marked-up price paid
However, it is important to remember that the calculation of the marked-up price paid, as specified above, does not correspond to the amount of the final indemnity. The final indemnity may include other contract terms, including the deductible.
*Option in effect January 15, 2025, Autorité des marchés financiers.
