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We look at what direct compensation property damage is, what it covers (and what it doesn’t), and other important facts you need to know.
Part of the no-fault auto insurance system, direct compensation property damage (DCPD) is a mandatory component of car policies in Ontario, Quebec, Nova Scotia, New Brunswick, Newfoundland and Labrador, Prince Edward Island and, most recently, Alberta. The bigger question is: What does DCPD do for you?
Call it the “phew” type of insurance. DCPD automatically covers your repair bills when another person causes a collision or damages your car. (Not exactly what you want to be dealing with after a car accident that wasn’t your fault.)
With DCPD, you work directly with your own insurance company, instead of worrying about third parties. Once you’ve been compensated for a claim, your insurer takes on the hassle of asking the at-fault driver or their insurance provider for reimbursement.
The coverage generally comes with no deductible, meaning you won’t be out-of-pocket when you need to fix up your ride.
“[DCPD] creates a more fair and efficient approach to vehicle repairs,” says Rob de Pruis, national director of consumer and industry relations at the Insurance Bureau of Canada (IBC). “It speeds up the repair process, and there are fewer delays and complications, as opposed to dealing with a different insurance company that you don’t know or have any type of a relationship with.”
With DCPD, damages to your vehicle in not-at-fault collisions are covered by your own insurance company instead of the at-fault driver’s, notes de Pruis. “You choose an insurance provider, and that’s the company that’s going to be assisting you when you have damages to your vehicle,” he says.
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, including:
For more information on the different types of coverages available, read our guide to getting the best car insurance in Canada.
Bad news: You’re out of luck if the accident was your fault. If you’re at fault for a collision, you’ll need collision insurance (or all-perils coverage, depending on where you live) to pay for the damage, which is optional and comes at an extra cost.
Collision insurance pays for repairs when you hit either another car or an object (think a tree or a lamp post) while driving.
Also important: DCPD doesn’t apply to hit-and-run situations. If it can’t identify the culprit, your insurance company doesn’t have any way of recouping the costs of your claim. If you’re ever hit by an unknown driver, your claim would be processed through your collision or all-perils coverage—if you have it.
Direct compensation for property damage coverage is mandatory in all provinces with a no-fault insurance system: Ontario, Quebec, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island. The provinces of British Columbia, Saskatchewan and Manitoba—where drivers purchase insurance from the government—do not have DCPD. However, similar rules under different names are part of basic insurance policies in these areas.
On Jan. 1, 2022, Alberta became the latest province to adopt a DCPD system. According to the IBC, the change will help create a “fairer and more customer-focused approach to insurance claims and vehicle repairs” in the province.
Narrowing down the cost of DCPD is tough, as it’s bundled in the price of your basic auto insurance policy. So here, we look at the average prices of premiums for the provinces that have DCPD coverage. Below is a snapshot of how much it cost to be insured per year in no-fault provinces, according to the most recent data from IBC:
The introduction of DCPD in Alberta offers a glimpse into the impact a direct compensation approach has on insurance premiums.
“DCPD better aligns insurance premiums with the costs associated with repairs for a vehicle,” notes the IBC website. “This means that, typically, owners of less expensive vehicles that cost less to repair will pay less for their insurance. Similarly, owners of more expensive vehicles that cost more to repair may pay more.”
According to the industry group, under DCPD, 42% of drivers in Alberta were expected to see a reduction in their insurance premiums, and 34% were expected to see an increase of 0% to 5% in their premiums. Fifteen percent of drivers were expected to see no change at all.
You can securely purchase insurance online or over the phone. You may wish to contact a bank, credit bureau or insurance provider that offers auto insurance, or an independent and licensed insurance broker who can comparison shop and find the best deal for you. Online comparison websites like Ratehub.ca allow you to quickly and easily compare auto insurance quotes from multiple providers. (Note: Both Ratehub.ca and MoneySense.ca are owned and operated by Ratehub Inc.)
To receive a quote faster, make sure to have the following information with you:
There are go-to steps to take whenever you are in an accident, whether it’s your fault, someone else’s fault or a hit-and-run. For easy reference, print a copy of the IBC’s accident report form and keep it handy in your glove compartment. It tells you what to do, step by step, while you’re feeling scattered.
Important advice on the sheet includes:
Regardless of who’s at fault—that’s for the insurance company to decide, not the police—report the accident in writing within the seven-day threshold of your insurance policy so you’re entitled to your available coverage. Also, don’t bring your car to the body shop too quickly. An insurance company can’t assess the damage once the repair process has started.
A claims adjuster will step in and review your file. They will either meet with you in person or handle the claims process over the phone and by email. They may ask you to fill out a proof of loss form which is a sworn statement verifying your claim; it requires all the details surrounding the damage, and the expected cost to repair or replace your car and, if applicable, its contents and your property as well.
Stay patient while making a claim, because an adjuster needs time to determine how much coverage you are entitled to based on your policy and the facts of your accident. Most of all, don’t be afraid to ask questions if you need to better understand what your benefits are.
Like a number of other car insurance coverages, DCPD may be mandatory in your province. You may wish you could opt out of it, thinking this would reduce your premiums (when, often, the opposite is true). Remember: The upside to a DCPD policy is that there’s no time wasted chasing down various insurers and payments because you’re only dealing with one insurance company—your own. In the aftermath of a car accident, that convenience will make you glad you have it. (There’s that “phew” again.)
Part of the no-fault auto insurance system, direct compensation property damage (DCPD) is a mandatory component of car policies in Ontario, Quebec, Nova Scotia, New Brunswick, Newfoundland and Labrador, Prince Edward Island and, most recently, Alberta. The bigger question is: What does DCPD do for you?
Call it the “phew” type of insurance. DCPD automatically covers your repair bills when another person causes a collision or damages your car. (Not exactly what you want to be dealing with after a car accident that wasn’t your fault.)
With DCPD, you work directly with your own insurance company, instead of worrying about third parties. Once you’ve been compensated for a claim, your insurer takes on the hassle of asking the at-fault driver or their insurance provider for reimbursement.
The coverage generally comes with no deductible, meaning you won’t be out-of-pocket when you need to fix up your ride.
“[DCPD] creates a more fair and efficient approach to vehicle repairs,” says Rob de Pruis, national director of consumer and industry relations at the Insurance Bureau of Canada (IBC). “It speeds up the repair process, and there are fewer delays and complications, as opposed to dealing with a different insurance company that you don’t know or have any type of a relationship with.”
With DCPD, damages to your vehicle in not-at-fault collisions are covered by your own insurance company instead of the at-fault driver’s, notes de Pruis. “You choose an insurance provider, and that’s the company that’s going to be assisting you when you have damages to your vehicle,” he says.
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, including:
For more information on the different types of coverages available, read our guide to getting the best car insurance in Canada.
Bad news: You’re out of luck if the accident was your fault. If you’re at fault for a collision, you’ll need collision insurance (or all-perils coverage, depending on where you live) to pay for the damage, which is optional and comes at an extra cost.
Collision insurance pays for repairs when you hit either another car or an object (think a tree or a lamp post) while driving.
Also important: DCPD doesn’t apply to hit-and-run situations. If it can’t identify the culprit, your insurance company doesn’t have any way of recouping the costs of your claim. If you’re ever hit by an unknown driver, your claim would be processed through your collision or all-perils coverage—if you have it.
Direct compensation for property damage coverage is mandatory in all provinces with a no-fault insurance system: Ontario, Quebec, Nova Scotia, New Brunswick, Newfoundland and Labrador, and Prince Edward Island. The provinces of British Columbia, Saskatchewan and Manitoba—where drivers purchase insurance from the government—do not have DCPD. However, similar rules under different names are part of basic insurance policies in these areas.
On Jan. 1, 2022, Alberta became the latest province to adopt a DCPD system. According to the IBC, the change will help create a “fairer and more customer-focused approach to insurance claims and vehicle repairs” in the province.
Narrowing down the cost of DCPD is tough, as it’s bundled in the price of your basic auto insurance policy. So here, we look at the average prices of premiums for the provinces that have DCPD coverage. Below is a snapshot of how much it cost to be insured per year in no-fault provinces, according to the most recent data from IBC:
The introduction of DCPD in Alberta offers a glimpse into the impact a direct compensation approach has on insurance premiums.
“DCPD better aligns insurance premiums with the costs associated with repairs for a vehicle,” notes the IBC website. “This means that, typically, owners of less expensive vehicles that cost less to repair will pay less for their insurance. Similarly, owners of more expensive vehicles that cost more to repair may pay more.”
According to the industry group, under DCPD, 42% of drivers in Alberta were expected to see a reduction in their insurance premiums, and 34% were expected to see an increase of 0% to 5% in their premiums. Fifteen percent of drivers were expected to see no change at all.
You can securely purchase insurance online or over the phone. You may wish to contact a bank, credit bureau or insurance provider that offers auto insurance, or an independent and licensed insurance broker who can comparison shop and find the best deal for you. Online comparison websites like Ratehub.ca allow you to quickly and easily compare auto insurance quotes from multiple providers. (Note: Both Ratehub.ca and MoneySense.ca are owned and operated by Ratehub Inc.)
To receive a quote faster, make sure to have the following information with you:
There are go-to steps to take whenever you are in an accident, whether it’s your fault, someone else’s fault or a hit-and-run. For easy reference, print a copy of the IBC’s accident report form and keep it handy in your glove compartment. It tells you what to do, step by step, while you’re feeling scattered.
Important advice on the sheet includes:
Regardless of who’s at fault—that’s for the insurance company to decide, not the police—report the accident in writing within the seven-day threshold of your insurance policy so you’re entitled to your available coverage. Also, don’t bring your car to the body shop too quickly. An insurance company can’t assess the damage once the repair process has started.
A claims adjuster will step in and review your file. They will either meet with you in person or handle the claims process over the phone and by email. They may ask you to fill out a proof of loss form which is a sworn statement verifying your claim; it requires all the details surrounding the damage, and the expected cost to repair or replace your car and, if applicable, its contents and your property as well.
Stay patient while making a claim, because an adjuster needs time to determine how much coverage you are entitled to based on your policy and the facts of your accident. Most of all, don’t be afraid to ask questions if you need to better understand what your benefits are.
Like a number of other car insurance coverages, DCPD may be mandatory in your province. You may wish you could opt out of it, thinking this would reduce your premiums (when, often, the opposite is true). Remember: The upside to a DCPD policy is that there’s no time wasted chasing down various insurers and payments because you’re only dealing with one insurance company—your own. In the aftermath of a car accident, that convenience will make you glad you have it. (There’s that “phew” again.)
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The new DCPD rules in Alberta are just another band-aid solution that ignores the real problem of bad bad drivers due to the lax driving training and testing rules. Any monkey can start a car and put it in drive but have no driving ability or sense at all. Once again I am paying for their repairs on all these very expensive vehicles that only takes a small dent to be extremely costly. Very unfair!