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- What is direct compensation property damage (DCPD) car insurance?
- How does DCPD work?
- What are the rules for collecting DCPD?
- Is direct compensation property damage mandatory?
- What does DCPD cover?
- Is there a deductible for direct compensation and property damage coverage?
- The latest updates on DCPD coverage in Canada
- What’s the process of filing a DCPD claim after an accident?
- Frequently asked questions about DCPD car insurance in Canada
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What is direct compensation property damage (DCPD) car insurance?
Direct compensation property damage (DCPD) is coverage that pays the cost of repairing or replacing your car if you damage it in a collision with another car and you're not responsible for the accident. DCPD is a standard insurance coverage in no-fault provinces. It's available in Ontario, Quebec, Nova Scotia, New Brunswick, Newfoundland, P.E.I., and Alberta (all no-fault insurance provinces).
When you're 100% not at fault for an accident, you don't pay a deductible to get a DCPD settlement. However, there are some instances where you are partially at fault but still can have some of your costs covered by DCPD. In the latter scenario, you will likely have to pay a deductible.
How does DCPD work?
After an accident, insurance adjusters acting on behalf of your insurance company get to work figuring out who or what caused the collision.
The provincial government sets the framework adjusters use to make their final determination (see Ontario's fault determination rules).
According to the provincial framework, you can be 0%, 25%, 50%, 75%, or 100% responsible for an accident.
Once fault is decided, your insurance will determine what type of settlement you will receive.
If you are 100% not at fault, your insurance will typically cover all your costs.
If you are partially responsible for the accident, you may be able to draw on your DCPD coverage. However, you'll have to pay a deductible.
Your insurance company will multiply the loss expense by the percentage you weren't responsible for. Then, your insurer multiplies your deductible by the percentage you weren't at fault for. The loss expense is subtracted from the deductible. The total is the settlement you'll receive.
Here's an example from Ontario Owner's Policy (OAP 1):
- Your car has a cash value of $12,000.
- You are involved in an accident, and your car is a total loss.
- The insurance determines you are 25% at fault for the accident.
- Your DCPD deductible is $300
That means:
- 75% of $12,000 is $9,000 (12,000 x 0.75)
- 75% of $300 is $225 (300 x 0.75)
- $9,000 - $225 = $8,755
You will receive $8,755 from your insurance company after you pay $225.
You can qualify for DCPD even if a friend or relative was driving the car.
What are the rules for collecting DCPD?
The following conditions have to be met for you to collect DCPD.
- You cannot be 100% at fault to receive a DCPD settlement.
- There must be two or more vehicles involved.
- All vehicles involved have insurance.
- The collision must have occurred in a province that has DCPD.
- If you had to pay a deductible, you can't sue the other party to recover it.
If you're involved in an accident, and you think you might qualify for DCPD, be sure to:
- Notify your insurance company within seven days of the accident.
- Protect your car from further damage.
- Make no repairs beyond those needed for protection.
- Not remove evidence of the damage.
Is direct compensation property damage mandatory?
DCPD is mandatory in most provinces where it's available.
Provincial governments introduced DCPD to simplify the claims process. Before DCPD was part of standard coverage, insurance companies would have to pursue each other to recover damages, which meant that the people hurt in a crash endured longer wait times for restitution. Under today's regulations, your insurance company pays your DCPD settlement immediately.
Ontario is an exception to the rules. Starting in 2024, DCPD will still be included in a standard insurance policy, but Ontario drivers who wish to lower their premium can remove it. However, they'll have to use their own money to repair or replace their car — even if they didn't cause the collision. They will also be prohibited from suing for repairs.
If you're looking to cut your insurance bills, insurance professionals recommend finding other ways. Most drivers likely need help to afford to repair or replace their car.
What does DCPD cover?
| Desired protection | Will DCPD cover it? |
|---|---|
| Cost of damage to the car when not at-fault for the accident | Yes |
| Cost of damage to equipment and contents when not at-fault for the accident | Yes |
| Pay for storing the car (costs associated with preventing further damage to the car) | Yes |
| Pay for towing | Yes |
| Pay for loss of use | Yes |
| Full replacement value of the car and its contents | No — will only pay for to repair or replace the property at its actual cash value at the time it was damage and no more (ie, depreciation is factored in) |
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Is there a deductible for direct compensation and property damage coverage?
If you’re 100% not at fault for an accident, there is usually no deductible.
You may have to pay a deductible if you’re between 25% to 75% responsible.
A deductible is the amount you agree to pay toward the cost of a claim you make under this section of your policy. You can find your deductible amount in your automobile policy.
You must pay it each time you file a claim under your DCPD coverage. The deductible amount is multiplied by the percentage you were not at fault.
If your car and its contents are damaged, the deductible is first applied to the automobile loss. If there’s any remaining deductible, it’s used towards the contents loss.
You can’t sue to recover the deductible.
The latest updates on DCPD coverage in Canada
The value offered by DCPD is the subject of debate in parts of the country.
Alberta made DCPD a mandatory insurance coverage in 2022 to help contain spiralling car insurance costs in the province.
Alberta policymakers studied the results DCPD delivered in Ontario after it became compulsory in the 1990s and found it had a stabilizing effect: DCPD freed up Ontario courts (legal battles inflate premiums for everyone) and ensured that people who were not at fault for an accident got the funds they need in a timely manner.
However, in 2024, Ontario drivers now can remove DCPD from their policy using an endorsement, OPCF49. Removing this coverage may lower your premium but means you won’t get money from your insurance company to fix your car, even if you didn’t cause the accident. You also can’t sue the other driver for money to repair or replace your car.
Ontario drivers are recommended to keep DCPD coverage and use other methods to find savings.
What’s the process of filing a DCPD claim after an accident?
You can claim DCPD coverage if you're involved in a collision with one or more cars.
You must file a claim with your insurance company within seven days of the accident. Be sure to have as much information as possible about the circumstances of the accident and the losses.
In the immediate aftermath, protect your car from further damage. It will make it easier for insurance adjusters to inspect your car and prevent further damage to your car (which won’t be covered). Store your car somewhere safe. If your claim is approved, DCPD coverage will reimburse you for storage.
Make no repairs beyond those needed for protection or remove evidence of the damage without your insurance company’s written consent or until they’ve inspected the vehicle.
Frequently asked questions about DCPD car insurance in Canada
How much does DCPD car insurance coverage cost?
The exact amount will vary. It depends on your premium, which is calculated based on your location, your car, and your risk factors. Generally, DCPD makes up anywhere between 5% to 10% of your total premium.
Your insurance agent or broker may be able to provide you an exact breakdown of your premium.
Is DCPD in Ontario mandatory?
DCPD is included in a standard auto insurance policy, but Ontarians will have the ability to remove it starting in 2024.
What is OPCF 49?
OPCF 49 is a new endorsement in Ontario. It’s the form to fill out if you want to remove DCPD coverage from your policy.
It's also known as Agreement Not to Recover for Loss or Damage from an Automobile Collision.
If you apply for OPCF 49, it means you agree that not be compensated by insurance — even if you’re not at fault —for any of the following:
- Repairs
- The value of the vehicle
- A replacement vehicle
- Loss of use
- Loss or damage to any contents
Drivers who are leasing or financing their car should not fill out OPCF 49 without consulting their lender first.
Can I get a quote on direct compensation property damage coverage alone?
Since it's part of a standard policy, you can't get a quote for DCPD alone. If you’re curious to see how much of your monthly insurance bill goes towards DCPD coverage, your insurance agent or broker may be able supply a breakdown of your premium.
