In Ontario, part of the no-fault auto insurance system includes coverage in the event that you are in a not-at-fault accident. Direct Compensation Property Damage (DCPD) is a mandatory component of car policies in provinces with no-fault systems. So, why is it such an integral part of your auto policy? Let’s take a closer look.
What exactly is DCPD?
Direct Compensation Property Damage is when your insurer pays for your vehicle (property) repairs after a collision. In the provinces with a no-fault insurance system, DCPD is one part of a basic auto insurance policy. It works in conjunction with other mandatory coverages, such as:
- Third-Party Liability Insurance (TPL) that covers the damage to another person’s car or property, their medical care and, in the worst-case scenario, their funeral, when you cause an accident.
- Uninsured motorist coverage, also known as uninsured auto insurance. This covers the damage to your car and property, medical care and even your funeral, when an uninsured driver causes an accident.
- Accident Benefits coverage, which pays for necessary medical services after an accident that are not already given by your provincial healthcare system. Think physiotherapy or an at-home care worker.
Because it’s part of the no-fault system, it doesn’t matter whether you’re at-fault or not. It’s standard on all car insurance policies in the provinces where no-fault insurance exists; including Ontario, Quebec, Nova Scotia, New Brunswick, Newfoundland, PEI and Alberta, as of January 2022. DCPD speeds up the claims process because you deal with your own insurer.
When can I access this coverage?
In order for you to access DCPD insurance in Ontario, there are four criteria that must be met:
- Not at-fault: You must not be at-fault for the accident. At-Fault Accident Determination Rules under the Insurance Act are important to assess who is responsible for the collision.
- Vehicle involvement: One or more vehicles must have involvement in the accident.
- Insured: The vehicles in the accident must be identifiable and legally insured in Ontario.
- Location: The accident must happen within Ontario.
If you are in an accident that is not your fault, your insurance company pays to repair your car under the DCPD section of your policy. Most policy holders do not have a deductible for direct compensation property damage insurance and claims. This is the case because you are not at-fault. However, if you are found to be partially at-fault, as per the At-Fault Determination Rules, part of your claim will fall under collision coverage. In that case, you will have a requirement to pay the percentage of your deductible that you were found at-fault. For example, if you have a $500 deductible on your collision coverage and you are found to be 50% at-fault, you will have a requirement to pay $250 of your collision deductible to fix your vehicle.
6 things to know about Direct Compensation for Property Damage (DCPD)
DCPD better aligns insurance premiums with the costs for repairs of a vehicle. This means that owners of less expensive vehicles to repair will pay less for their insurance. Similarly, owners of more expensive vehicles that are more to repair may pay more – meaning a fairer system for everyone:
- If you have a not at-fault collision, you can arrange vehicle repairs with your own insurance company, not someone else’s.
- DCPD does not impact your right to sue for other damages, like injuries.
- If you are not at-fault for a collision, DCPD covers your vehicle damages, loss of use and any contents that are damaged. You still need to purchase collision coverage to have repairs completed when you are at-fault.
- Vehicle owners choose their insurance provider, which means you decide which company handles the vehicle repair process.
- DCPD Regulation provides transparency when determining fault for a collision.
- Ensures a more efficient process for vehicle repairs, since you don’t have to wait for someone else’s insurance company to start the process.
What if you are at-fault for the accident?
Being found to be at-fault for a collision means that you will need to have collision insurance (or all-perils coverage, depending on where you live) to pay for the damage. However, this is optional and comes at an extra cost. Collision insurance pays for repairs when you hit either another car or an object while driving. It is important to have this optional coverage. If you don’t and are in an accident, you will be solely responsible to pay for damage to your vehicle or to replace it if it’s a total loss.
Like a number of other car insurance coverages, DCPD is mandatory in Ontario. While opting out of it seems like a cost-cutting advantage, it really will not decrease your premiums. In fact, the opposite is true. One of the best perks about DCPD coverage is that there’s no time wasted to repair your vehicle. As you are only dealing with one insurance company, your process is much faster and easier.
Speak to one of our isure brokers today should you have any questions about DCPD coverage, deductibles are any other policy-related questions. We’re here to help!