When a person takes out comprehensive auto insurance, they trust it will offer protection so they won’t suffer a major financial loss in the event of an accident.

I can tell you, from my recent personal experience, it doesn’t always work that way.

Back in November, I backed into a telephone poll during a snowstorm. Oops! The car was still drivable, but the repairs would cost around $9,000 and there would be a wait for parts.

A week later, I hit a deer. Not my fault. It came out of nowhere. The car was no longer driveable. The damages would cost about $16,000 and there would again be a wait for parts.

I had bought the car just about 3 months prior. It only had about 7,300 km on it. It was basically brand new. I had full comprehensive insurance coverage, including depreciation waiver coverage, and loss of use coverage to provide me with a rental vehicle.

I thought I was well covered to prevent significant financial loss. I was wrong.

Loss of Use

The rental vehicle coverage from my insurance company only covered up to $1,500 of rental vehicle costs. Apparently this is the industry standard. Due to delays in getting parts recently, the insurance company was “graciously” increasing that coverage to $3,000. To get an equivalent vehicle (compact SUV) with winter tires, I used up that coverage in about one month. (And it was a fight to get a vehicle with winter tires.)

I knew it was going to be a while before my parts would come in. I faced paying for a rental myself at over $2,500/month. So to try to minimize my risk, I opted instead to buy another vehicle. I got a similar company SUV, two years old with low mileage. Now I had two car payments. The second car payment was higher than for the new vehicle because I had used up my savings for the down payment on the first one. Even still, I used all of my personal emergency fund to pay $10,000 down and topped that up with $2,500 from my line of credit, just to try to get the payment down. I also now had to pay insurance on both vehicles.

After about 6 months, my new car was finally fixed. (Mostly. They still needed to fix the air conditioning but said I could drive it until the dealership had time to fit me into the shop schedule.)

It was time to offload the second vehicle I’d purchased. Of course I lost the taxes I’d paid on it and since I’d put 25,000 km on it, and it was a few months older now, and the buyer (clutch.ca) had to make a profit on it, I sold it for $13,000 less than I paid for it. Plus I’d paid the cost of additional insurance during those months, interest on the loan, and the cost of the winter tires that were included in the deal when I sold it. Total loss on that was $15,000. It was more than I would have paid to rent for 5 months, but I didn’t actually know how long I would go without my car, so I couldn’t have predicted whether it made more sense to buy or rent.

That $15,000 won’t be covered by my insurance.

Loss of Value

With tax, I paid $44,000 for my new car. The CarFAX report shows about $24,000 in repairs completed through insurance following two collisions. As a result, if I sold my 6 month old car with just 7,500 km on it today, I’d be lucky to get $24,000. It has lost $20,000 in value.

I actually paid $20,000 down when I bought hey the car. That money is now gone. The insurance company won’t be reimbursing it.

Between the cost of a replacement value during repairs, and the loss of value, if we take into account natural depreciation of the vehicle, I’d still be out well over $20,000.

Oh, and to pick my car up when the repairs were done, I had to pay $1,250 in deductibles for the two claims.

I have experienced a significant financial loss despite being well insured.

I reached out to three lawyers, all of whom said it’s an unfortunate situation, for which I have no legal recourse. The insurance company was within their rights not to write off the vehicle despite the $25,000 in damages. Since they didn’t write it off, my depreciation waiver coverage didn’t kick in. And in Canada, insurance companies don’t offer coverage for lost value after an accident.

I’d love to say I have tips for you to make sure you never end up in the same situation. But I didn’t do anything wrong. This is just the reality of the situation. This is how the system works.

I fully recognize my privilege at being able to go out and get an alternate vehicle, and at not being bankrupted by this situation. I’m grateful for those things. It still stinks.

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This contents of this blog post are not intended as legal advice or interpretation of the law, but rather they outline my personal understanding of the impacts of certain situations and legalities as they related to my own circumstances.