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Direct Compensation - Property Damage (DCPD) Q&A

Is DCPD mandatory?

Yes, DCPD is a mandatory coverage.  Where it applies, your own insurer will now cover the portion of your automobile damage, contents damage and loss of use for which you are not at-fault.

Will I still need to purchase collision coverage?

You will still need to purchase collision coverage if you would like your at-fault damages to your vehicle to be covered by your insurer.

Will DCPD apply to all automobile accidents?

Generally, yes, DCPD applies when:

  • two or more insured vehicles are involved in an accident and their vehicles, contents, or both suffer damages;

     

  • the accident takes place in a jurisdiction where DCPD coverage is mandatory;

 

AND

 

  • the insurers of two or more vehicles involved in the accident are licensed (or have signed an undertaking to abide with DCPD) in that jurisdiction.

 

Are there any exceptions to the application of DCPD if the above conditions exist?

Yes.  Under the Fault Detemination Regulations, where the driver of one of the vehicles is charged with certain driving offenses and the driver of the other vehicle is at least partially at-fault under the regulation, the degree of fault will be determined as in the old system.

Explain Direct Compensation for Property Damage (DCPD) with regards to my vehicle damages?

Under the old system, if you get into an automobile accident, the other party's insurer pays for the portion of your vehicle's damage for which your not at-fault.  Your own insurer pays for the portion of your vehicle damage for which you are at-fault, if you have collision coverage.

Under DCPD, if you get into an automobile accident, your own insurer pays for the portion of your vehicle's damage for which you are not at-fault.  As in the old system, your own insurer pays for the portion of your vehicle damage for which you are at-fault, if you have collision coverage.

                           Summary of who Pays for your Property Damage 

 

 

 

 

If you are "At-Fault"

 

If you not "At-Fault"

 

Accidents occurring Pre-October 1, 2015

 

own insurer: collision coverage (if purchased)

 

other insurer: liability coverage

 

Accidents occurring on/after October 1, 2015

 

own insurer: collision coverage (if purchased)

 

own insurer: DCPD coverage

 

How will "fault" be determined?

"Fault" will be determined under the Insurance Act Automobile Insurance Fault Determination Regulations.  These regulations are based on past automobile accident fault settements which were made under the old system.  Practically consumers will see very little, if any, change to how accident fault is apportioned.

What if I'm not satisfied with the degree of fault assigned or the settlement offered by my insurer?

You may bring a court action against your insurer and the matter will be settled using the old system.

Does DCPD affect my right to sue for damages other than automobile property damage?

Only for vehicle contents (except for property carried for reward) and loss of use as outlined below.  All other rights are identical to the old system.

Under DCPD, can I sue the at-fault party for damages to my contents?

Generally no.  Under DCPD your own automobile insurer will cover the costs of your contents to the extent you are not at-fault, provided the contents were not being carried for reward.  You may be able to recover your at-fault portion of your content damages under your home insurance.

If your contents were carried for reward, you may be able to recover these damages under a commercial policy or from the at-fault party depending on the circumstances.

Under DCPD, who will pay loss of use/rental costs?

DCPD will cover your loss of use/rental costs to the extent you are not at-fault.  You may also have coverage for your at-fault portion of costs, dependent on whether you purchased the appropriate endorsement with your policy.

Is there a deductible with DCPD coverage?

No.  However, if you are partially at-fault that portion of your collision deductible will be applied to any recovery under your collision coverage.

What happens when DCPD does not apply because a party to the accident was insured by an unlicensed insurer who did not sign an undertaking?

As noted above, where DCPD does not apply, the accident will be settled under the old system.  However, because PEI registered vehicles are required to be insured by insurers license in PEI, and the vast majority of vehicles insured in NS, NB, QC and ON are also insured by insurers licensed in PEI, DCPD will apply to the vast majority of collisions in PEI.

How will DCPD affect my rates?

Who pays for the damage, is a separate issue from who's at-fault for rate purposes.  Just as under the old system, fault will be determined and at-fault accidents may affect your rates.

Industry requires no additional revenue to administer the coverage.  There may, in fact, be savings to assist in keeping rates as low as possible.

Insurers will know exactly what type of vehicle they will repair or replace in the event of an accident.  Therefore, there will be some rate offset amongst consumers depending on the value of their vehicles.  Consumers with more expensive vehicles may pay a little more and consumers with less expensive vehicles may pay a little less.

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