Direct compensation property damage insurance
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What is DCPD insurance?
Matt Hands, VP, Insurance
Direct compensation property damage (DCPD) is when your insurer pays to have your vehicle (property) repaired after a collision. It's part of the no-fault car insurance system, so 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 expedites the claims process because you deal with your own insurer.
The impact of no-fault insurance on DCPD coverage
Did you know that it’s actually the insurance company who determines which driver is at fault in a collision and not the police, though the police report helps. You can see images and examples of how it works on Ontario’s fault determination rules page. Sometimes in a crash, it's not 100% any one person's fault. Fault can be shared and it doesn’t need to be equal either.
Let's say a driver turns left from the rightmost lane and you, driving in the left lane, don't stop in time and hit the car. In this instance, according to the fault rules, you are 25% at fault. In this case, 75% of the damage to your vehicle would be covered by DCPD; the remaining percentage would fall to your collision coverage if you have it. Based on the various scenarios we’ve outlined, the addition of collision coverage to your policy is generally recommended for all drivers in Canada.
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How a direct compensation property damage deductible works
If your vehicle sustains damage after a collision that wasn't your fault, your insurance company will pay to repair your car under the DCPD section of your policy. Assuming you have a $0 deductible for DCPD claims, there is no deductible to pay.
Most policies don’t have a direct compensation property damage deductible, but you can add one for any amount if you want. However, there are a couple of instances where DCPD coverage doesn’t apply even if you aren’t at fault. In these circumstances, you will need supplemental coverage for your vehicle repairs to be covered by your insurer.
For example, you're driving in Toronto, and a US driver rear-ends you. If the US driver's insurance company hasn't agreed to follow the DCPD rules following a collision, your insurer will look to your collision insurance.
Your collision coverage is optional and does have a deductible associated with it. Unfortunately, if you do not have collision insurance, you’ll have to pay for the repairs out of pocket. Though there is still a way to recoup your expenses, you just have to deal directly with the at-fault driver’s insurance company.
The same rule above applies in any province that doesn’t have DCPD or if you’re in a hit and run collision. If your insurer can’t identify the driver, they won’t be able to seek reimbursement. So you’ll need to have collision coverage on your policy to have your repairs covered.
How DCPD coverage factors into mandatory car insurance
Mandatory car insurance in a no-fault system includes third-party liability, accident benefits, direct compensation property damage (DCPD), and uninsured motorist. Let’s break it down.