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Obvi Derek

What Should You Consider When Buying Car Replacement Insurance?

Automobile replacement insurance is a unique product. Vehicles depreciate over time, and few drivers can afford to buy a brand new automobile after suffering a write-off. The value of replacement insurance in the event of a total loss is undeniable.

New car replacement insurance isn’t free, however, and there are options about what kind of coverage to purchase. For many automobile owners, the goal is finding the best value for the price.

To help potential customers better understand this topic and avoid paying too much for your coverage, let’s take a look at your options available for car replacement from Obvi.

Annual policy from Obvi

This option allows you the flexibility of obtaining coverage year over year. You purchase one year of coverage at a time, and then at the end of the year you can choose to renew for another year or to let the coverage lapse.

The downside to this option, however, is that if you keep your coverage for 3, 4, 5, 6 or 7 years, the total that you will end up paying will be much higher than if you would have purchased a multiyear policy from the beginning. The upside: if you have a claim in Year 2, you would have paid much less for the policy by going year-to-year, and you get to pay monthly.

Multiyear policy from Obvi

These are easily the policies that offer the best value. By agreeing to a multiyear policy right at the start, you get a significant discount for the total cost of your premium. If you know right away that you want multiple years of coverage for your vehicle, this option is a no-brainer.

Replacement insurance from your existing auto insurer

More and more insurers are offering a replacement cost rider with your collision and comprehensive coverage. While adding this kind of coverage onto your existing primary insurance seems convenient, it comes at a high cost.

How? Premiums are set very low in the first year, to entice people to buy, but they increase significantly year over year. The cost of your policy for Year 5 will be a lot higher than the cost of your policy for Year 1.

So, why should someone buy a multiyear policy from an independent company instead of their existing insurance? Let’s have a look at what can happen if you don’t:

  1. Coverage is only eligible from existing insurer when vehicle is new, so if you switch insurance providers in Year 3 you could lose the replacement endorsement
  2. The premium charged for Year 3/4/5/6/7 is significantly higher than Year 1 or 2, and you have no way of knowing what it will look like
  3. What if your auto insurer non-renews your auto insurance or you find a better deal? A 3-year old vehicle might not be eligible for replacement when it is no longer new
  4. What if your auto insurance becomes increasingly expensive while you carry collision and replacement with the same carrier?

Visit Obvi’s page for New Car Replacement Insurance to learn more or request a quote.

Are Extended Car Warranties Insurance?

When you buy an extended warranty product, how do you know that you’re making a secure purchase?

It’s a fair question, and one that many drivers ask for a reason. For decades Canadians had no choice, and there were companies that sold extended automobile warranties that weren’t always honest or reputable, and these companies gave the entire industry a bad reputation. Furthermore, honest companies like Sears defaulted and their warranty program went down with them, increasing the frustration faced by Canadians.

Luckily, however, many Canadian drivers can now buy safely because of one big change: extended warranties as insurance products.

Why are insurance products more secure?

Simply put, the world of insurance is guided by strict regulations and monitored for financial stability.

In order to run an insurance business, companies need to follow both federal and provincial guidelines about what they are and aren’t allowed to do. These restrictions are primarily  in place to protect consumers from unscrupulous companies.

What should consumers look for?

An A-rated insurer is the safest bet for Canadians because they have proven track records.

How do extended warranties as insurance work?

All insurance works by covering the consumer for events that shouldn’t occur.

Extended warranties as insurance work in a similar way: by covering your vehicle for problems that aren’t supposed to occur.

These policies are as good as the warranties offered by vehicle manufacturers, if not better. And with the financial security of insurance companies, these policies are welcomed by all shops because they know the insurer will be able to pay for the repairs.

What does an Obvi extended warranty cover?

Obvi models our warranties off of the comprehensive coverage offered directly from vehicle manufacturers. We outline a small list of exclusions, and if something isn’t explicitly excluded, it’s covered! This allows us to provide the most broad coverage as possible. This is important, because not only does it protect customers against problems that are rare or unexpected, it also helps us cover all the new and exciting electronic features that are constantly being added to vehicles.

Visit Obvi’s website to learn more, or get an instant quote for free within minutes.

Will Dealerships Honour An Obvi Warranty?

 

One of the questions that Obvi team members receive regularly goes something like this: “Will dealerships honour your warranties?”

This question has its roots in how the world of automobile extended warranties used to be.

For a long time, extended warranties could only be bought from dealerships or directly from manufacturers, and drivers would be restricted about where they could take their vehicles for claims. If you bought a Ford extended warranty you had to take your vehicle to a Ford service center, if you bought a Dodge extended warranty you had to take your vehicle to a Dodge service center, and so on.

To put that another way, a Ford dealership won’t honour a Dodge warranty, and vice versa.

Eventually, independent companies that also sold extended warranties entered the market, before the insurance industry ultimately took control. Insurance regulation was a huge turning point, as all shops — dealers included — are happy to accept payment from licensed, financially stable Canadian insurance companies.

Obvi gives you freedom about where to take your vehicle

We recognize that different drivers have different needs about where they service their vehicles. Some people like to take the vehicle back to the dealership where it was bought; some people have specific mom-and-pop shops that they have a long history with; some people like specialized garages for import cars; and some people just choose a place because the location or hours are convenient.

That’s why we want our customers to have choices about where to take their vehicles for servicing. As long as the destination is a licensed repair facility (sorry, we won’t pay your friend Bill for the repairs he does in his backyard), it’s fine by us.

Another big perk about our warranties: North America-wide coverage. Whether you’re driving away from home for work or making a road trip with your family, if a breakdown occurs we can still cover the cost of repairs.

How Obvi’s claims process works

We try to make our claims process as simple as possible for our customers.

First, notify your chosen shop that you have coverage through Obvi. Next, ask them to contact us directly with your information and the estimate. Finally, once the work has been approved and completed, Obvi will pay the shop directly.

That’s it! You don’t need to worry about paying for the repairs and then being saddled with those costs until we can reimburse you.

So, will dealerships honour our warranty? Yes!

The insurance industry pays billions of dollars in claims each year — there is no dealership or shop in the country that doesn’t want part of this. As long as dealerships are being paid for the work that they’re doing, they don’t really care where the money comes from. And to be honest, dealership service centers are great to work with. They know the brand, they know the parts, and they know how to get your vehicle fixed. If a dealer ever seems unsure about how our coverage works, simply tell them that you have a licensed Canadian insurance policy that will pay for the work on your behalf, and that they can contact us with any questions.

Visit our website to learn more about Obvi. You can also instantly receive a free Extended Warranty or GAP Insurance quote for your vehicle.

Frequently Asked Questions About Obvi Warranties

 

How does Obvi handle my claims? How do I make a claim?

In the event of a claim you can take your vehicle to any licensed repair facility in North America, including dealerships, and instruct them to forward the estimate to claims@obvi.ca. Once received, we will review the claim, approve it and pay the shop directly. It’s that easy! Don’t forget: any licensed repair facility is happy to accept payment from Obvi on your behalf!

Will Obvi provide a refund or incentive for not making a claim?

Obvi is proud to have reinvented vehicle warranties at a fair price without one of the most clever marketing tools ever used: the no-claims bonus.  The deck is stacked in favour of any provider making claim to a refund on insurance. It contradicts the fundamental principal of how insurance works — losses of the few paid by the many. If everyone received a refund for not filing a claim that would mean those who did make a claim would have paid more in premium than claims would ever hit. Read our blog here for a complete breakdown.

Where can I see what is covered? What do Obvi warranties cover?

The Obvi program offers full comprehensive coverage that is subject only to exclusions — this is how the original manufacturer’s warranty is usually issued. With Obvi you receive a full comprehensive policy with an easy-to-understand list of excluded components. Beyond that, you are covered for any failure that isn’t explicitly excluded, making this the broadest form of coverage you can buy. You can check out our warranty web page for more details about our program, including a simple PDF of some of the exclusions.

Is my Obvi warranty insured? How does that protect me?

Yes! All of our policies are insurance policies that are backed by a licensed and financially stable insurance company. When purchasing a warranty with a multi-year lifespan, the financial stability and ability to pay claims throughout the life of the policy is of utmost importance. With an “A”-rated Obvi warranty in hand, you can rest assured that your claims will be covered throughout the full term of the policy.

Does Obvi have a deductible?

Our warranty policies may have a deductible of $100 for any one warranty claim. Please refer to the terms and conditions in our policies for more information.

Why are cancellation and transfer options so important?

People’s needs change, and Obvi recognizes that. Any of the manufacturer-backed extended warranties are not insurance policies and are typically fully earned after 15-60 days. This is one of the biggest disadvantages of buying a manufacturer’s extension.

Why are Obvi warranties so much less than other options?

Obvi has streamlined the entire automobile warranty experience to make it easy and affordable. We sell our policies exclusively online, without any dealer markup or fees.  This allows us to offer our best price and coverage up front.

When do Obvi policies expire?

8 years from first-in-service date and or when you reach the kilometre limit you selected, whichever occurs first. Most manufacturer warranties are for 3 years.

When it the best time to buy? Can I finance my warranty?

The best price possible is always when the vehicle is new, and you will pay more when the vehicle is about to come off warranty. We provide you with options about how to pay, including financing for up to 3 years. Please connect with an Obvi agent to learn more.

What Obvi Learned In 2019

2019 is nearly over, and with the end of the year (and the decade!) fast approaching now is a good time to think about the year that was and to take stock of what was learned.

For Obvi, 2019 was our second full calendar year in business, and we’re thrilled with how much our company grew and evolved over the past 12 months. We’re offering something new and exciting to the Western Canadian automobile insurance industry, and the positive response we see from our customers is incredible. Obvi was created to give drivers a fair alternative to the overpriced and underwhelming extended warranty policies offered by dealerships, so it fills us with joy to see how much money people are saving.

In order to be a successful company we need to be alert and aware about both the automobile industry and the insurance industry. We also want to pass our knowledge on to our customers. As such, here is a rundown of some of the most important things that we learned in 2019.

Popularity of New Car Replacement Insurance

Obvi added one new policy in 2019: New Car Replacement Insurance. We knew that the policy would be a popular addition, but we were surprised at just how popular. With the soaring cost of vehicles and drivers learning more about the costly effects of depreciation, we expect the demand for this kind of policy to keep increasing from here.

Insurance industry is preparing for big changes

Intact Financial Corp., Canada’s largest property and casualty insurer, is expecting a disruption to the industry in the near future. What that disruption might be is still up for speculation, but with rapid advancements in digital technology and the sheer power of huge tech companies such as Amazon and Google, there are a lot of possibilities.

Automakers selling their own insurance — a potential game-changer

A big change could be coming soon to the world of automobile insurance: manufacturers offering their own coverage. Both Porsche and Tesla have already announced plans to do so, and other companies could follow suit.

As reported by Design News in April:

“The combination of autonomous driving and data changes the whole game,” Brian Carlson, director of product line management for connectivity and security at NXP Semiconductors N.V., told Design News. “So we’re starting to see where automotive OEMs will take more responsibility for insurance.”

It’s not yet clear how that would happen. The two could work cooperatively, enabling automakers to sell name-brand insurance along with vehicles. Or automakers could decide to do it themselves, bankrolling and selling insurance in the same way they now provide new-car financing. Either way, experts believe it would be a natural product extension for the industry.

“If they want to get into insurance, they will, and they should,” noted Sam Tawfik, CEO of LMP Motors, an e-commerce platform for buying and renting vehicles. “They already have the installed base of distribution. And if vehicles become autonomous, they can just roll the insurance onto that.”

One thing remains clear: insurers are struggling to keep up with rising claims costs, and with the autonomous driving this will only get worse. The biggest challenge insurers — new and old — will face is that not all vehicles will be autonomous, and the claims costs from old vehicles hitting new will be staggering.

Insurance rate increases will squeeze Albertans

Knowing that Albertans were feeling the pinch from tough economic times, the previous NDP government instituted a five per cent cap on car insurance rates in 2017. But the new UCP government, elected in April, decided to let that cap expire, leading to insurance companies increasing their rates.

The effect on Alberta car owners? A jump in what they pay for insurance, potentially as high as 20 to 30 per cent. Visit our friends at Surex to compare auto insurance.

Drivers keeping their vehicles longer

The numbers are in: drivers are keeping their vehicles for longer, with average length of time that drivers keep a new vehicle being around 6 years.

One of the biggest reasons why is that vehicles are simply made better than they were before, making it take longer for one to become a “Beater.” Another reason is an increase in the popularity of financing. If you’re financing a vehicle for as many as 84 or 96 months, it only makes sense that you’ll hold on to the vehicle as opposed to trading it in.

Looking forward into 2020

It’s impossible to fully predict what the future will have in store, but there are a few trends that we predict will happen.

The biggest one: new technology is going to lead to new problems.

The more technologically advanced vehicles become, the more specialized knowledge is required to fix them. This is especially true for electronic components such as sensors, back-up cameras and entertainment displays.

With so many different things that can go wrong with vehicles, it’s now more important than ever to make sure that you’re protected from expensive repair bills. With an Obvi extended warranty you can get up to 8 years and 160,000 kilometres of comprehensive coverage, including complex electrical components. Visit our website to get a free instant quote or chat with a live agent, or schedule a phone call at a time that works for you.

5 Tips For Trading In Or Privately Selling Your Vehicle

So, you’ve decided that, for one reason or another, you want to switch from your current car to a new one, either by trading it in to a dealership or by selling it privately.

What’s the next step you should take?

There are a few, actually! And they’re all important steps to take to ensure that the process goes smoothly and that you receive a fair deal.

Here now are Obvi’s Top 5 tips to know before selling your vehicle:

Make your vehicle look pretty

This is an obvious one, but it’s still worth mentioning. Make sure to give your vehicle a good cleaning — both inside and outside. Even though it doesn’t actually affect what the car is worth, it’s still a sign to potential buyers that it was well taken care of. If the outside of your car is covered in deep layers of dirt and there is garbage all over the floor on the inside then it’s going to be harder to convince anyone that you’ve taken the time and effort to give the vehicle routine check-ups and oil changes.

Research its value

Accurately determining a car’s value is no easy task. There are many different kinds of vehicles on the road, specific makes and models can have a variety of special features, and all vehicles lose value relative to how old they are and how many kilometres they have been driven. Just because you value your vehicle at a certain dollar figure in your mind doesn’t mean that the market of potential buyers is going to agree.

The “Price a Car” tool on the Autotrader website is a great way to determine your vehicle’s value, but it’s also worth taking the time to look online to see what other people are selling similar vehicles for to get a slightly better feel for the market. Both Autotrader and Kijiji Autos are good resources for that.

Get a CARFAX report

A lot of different things can happen to a vehicle that reduce its value, and not all of them are immediately noticeable. Unsurprisingly, this makes many dealerships and private buyers incredibly cautious and skeptical before agreeing to a deal, even if your car has never had any problems.

By getting a report from the trusted company CARFAX, you can prove to any would-be buyer the major history of your vehicle.

Have your documents ready

Not only does having your bill of sale and proof of insurance help prove that you’re not some sort of scammer, having receipts of all your oil changes and service appointments on hand to show a potential buyer increases the trust in both you and your car.

Shop (or sell) around

If you aren’t in any kind of immediate rush to make a decision, it’s worth putting in the time and effort to shop around (or, more accurately, sell around). The more potential buyers you find that are interested, the better your odds of finding a fair deal — or maybe even getting a better price than you initially expected.

Why It’s Important To Have Warranty Coverage On Your Vehicle

When motorists go to buy a new vehicle, they’re often faced with a number of important questions: what’s my budget? What type of vehicle should I buy? What make of vehicle should I buy? What features and options do I want included?

Another factor that should be taken into account more often than it usually is: how much warranty coverage am I getting?

It may come as a surprise that different car manufacturers offer different warranty coverages. For example: Ford and Toyota offer 3 years / 60,000 kilometres, while Kia and Hyundai provide 5 years / 100,000 kilometres.

This matters because there are different perks to having your vehicle covered by warranty — and there’s nothing worse than needing it, only to have discovered that it has already expired.

Here are some important reasons why it’s beneficial to have your vehicle covered by warranty for as long as possible.

Less money to spend on repairs

This is an obvious one.

If a breakdown occurs that is covered by your warranty policy, you won’t need to pay out of pocket to have it fixed. Costly breakdowns can happen to all vehicles, including brand new ones, so the longer you have a warranty for, the longer your breakdown repairs will be covered for.

Warranties add value for trade-ins and private sales

Even if you spend plenty of time researching and deciding what new vehicle to purchase, there’s no guarantee that actually keeping the same vehicle will be the right decision.

Maybe an unexpected financial emergency pops up that requires you to save money somewhere, such as downgrading to a more affordable vehicle. Perhaps you soon realize that you need a vehicle that has more seating or better towing capacity. Or, heck, maybe you discover that you just flat-out don’t enjoy driving the vehicle as much as you thought you would.

If you decide to trade in or privately sell a vehicle, an existing warranty adds a lot of value to it and helps you to negotiate a better price.

Stuck with a short factory warranty? Get it extended

So, you’ve taken your time and done all of your research, but for one reason or another you’ve still decided that the next car, truck or SUV you purchase will be one that comes with a shorter warranty of just 3 years.

Luckily for you, getting the benefits of longer protection is still possible, thanks to an Obvi extended warranty!

Not only do we specialize in selling extended automobile warranties, all we require is that you still have some existing comprehensive factory warranty remaining on your vehicle prior to purchasing with us, and that you’ve followed the manufacturer’s maintenance guidelines up to that point.

Additionally, Obvi’s extended warranties are for up to 8 years from when the vehicle was new, so even if you get 5 years of coverage straight from the manufacturer we can provide you 3 years on top of that, giving you the perks discussed above for longer.

Check out the extended warranty page of our website to learn more and to receive a free instant quote for prices.

Important Information To Know About Extended Warranty Refunds

Like most goods and services, extended warranty policies come with the option of getting refunds.

However, extended warranties — especially automobile extended warranties — are unique entities, and as such, have unique characteristics about when and how refunds are available.

The purpose of this Obvi blog is to help spread some important details that consumers should know and remember about how these work.

First, let’s consider how buying warranty or insurance works. The losses of the few are paid by the many, which explains why no other kind of insurance product in Canada offers a refund — not home insurance, not life insurance, not car insurance.

So, why are many automobile extended warranties eligible for refunds? Truth be told, the deck is stacked in favour of the warranty provider — let’s look at why.

Exclusions and eligibility

As with any and all insurance policies, it’s always important to read the fine print for exclusions and eligibility. The last thing you want is to think you’re still covered, and make decisions based on that assumption, only to later discover that you were wrong.

For example: many vehicle warranty policies have kilometer caps for refund eligibility. Once a kilometer threshold has been crossed, there goes your chance at getting a refund.

Claims erase your right to a refund

This one might seem obvious, but some people still miss it. For most policies, any time you make a claim it waives your chance to collect a refund at a later date. Why? Because if an insurance company has already paid you money for a claim then your premium is considered to have been used up.

Check the timeframe limits

All policies with refund options have a timeframe where the request has to be made. For example, 60 days after the policy has expired. Some companies will offer you something back if you miss this deadline, but not the full refund amount that you would have been entitled to otherwise.

Pro rata cancellation

How much refund you’re entitled to often depends on how much of your policy has lapsed. For example: many insurance policies offer refunds on a “pro rata” basis. The website Insuranceopedia gives a good example of how this works:

“For example, a policyholder purchases a one-year policy for $1,000 but cancels it after six months. In a pro rate cancellation, they would receive a refund of $500, which is equivalent to the remaining six months of coverage they forfeited.”

You might have to commit to the car if you want a refund

According to a recent article by Autotrader, the average length of time a driver keeps a new vehicle is 71.4 months, or roughly six years.

This is important to remember, because many policies require you to  keep your vehicle — and keep it safe — for the full term in order to be eligible for a refund. That means no sales or transfers, nor can the vehicle be written off. These kinds of requirements are red flags, as it suggests the company isn’t actually serious about refunding premiums — they fully expect you to lose your eligibility before the date it can become active.

If you have further questions about how Obvi’s refunds work you can always contact the company to connect with an agent.

What Are OEM Parts, And Why Are They Important?

 

If your vehicle is involved in an accident and needs serious repair work done, one of the last things that you want to worry about is the vehicle decreasing in value.

Now imagine how much harder it would be to trade in or privately sell a vehicle with a replaced door that’s not quite the same colour as the rest of the car, or a replaced spoiler that’s clearly an aftermarket part.

One sad but common practice in the insurance industry is insurance companies forcing repair garages to seek out the cheapest parts available when fixing vehicles after a partial loss. Not only does this include aftermarket parts, it also often means parts pulled from scrap yards.

This problem is one of the many reasons why the demand for OEM parts has become popular among many automobile owners. Short for “Original Equipment Manufacturer,” OEM parts are ones made by directly by the vehicle’s manufacturer.

There are a few different perks to ensuring that your vehicle is repaired using OEM parts.

First, as touched on earlier, OEM parts can also help to protect the investment you made in your car, truck or SUV. If you decide to sell or trade in your vehicle in the future, well-trained eyes can notice whether important parts are OEM or aftermarket, leading to a tougher sale or reduced dollar figures in an offer.

Another perk is that you get the peace of mind of knowing that the parts were originally intended to fit the specifications of your vehicle make and model — in other words, that they’re the exact parts that the manufacturer wanted to be used.

How Obvi can help

Don’t get stuck owning a one-year-old vehicle with parts from a junkyard.

Customers who purchase a New Car Replacement Insurance policy from Obvi have the choice of adding on OEM parts protection to their coverage. This option pays up to $2,500 per year in additional costs to ensure that OEM parts are used in your vehicle. And with coverage for up to five years, you’ll ensure that your vehicle investment is protected for longer.

How Does Obvi’s Claim Process Work?

Going through problems with your vehicle can be a stressful experience — the loss of use of your vehicle, the disruption of your plans and schedule, the new errands required to get the vehicle back on the road, etc.

Obvi knows that the last thing you want in that kind of situation is more stress, which is why we try to keep our claims process as simple and straightforward as possible for clients who have a policy with us.

Here is a quick explainer of how our claims process works for our different policies:

Extended Warranty claims

  1. Contact us and let us know there is something wrong while you go to any licensed repair facility in Canada or the U.S. for a repair estimate.
  2. Have the shop contact us regarding the estimate to repair. We will need a copy of the estimate emailed to claims@obvi.ca. Most claims only take a few moments to approve.
  3. Once approved, the shop can proceed with the repair. We will then pay the repair bill directly via credit card. You’re on your way!

GAP Insurance and New Car Replacement Insurance claims

  1. If something has happened to your vehicle and it has been written off by your auto insurer, contact us.
  2. We will request your claim information for processing.
  3. Once approved, payments will be settled promptly.