For Drivers

Direct Compensation for Property Damage

In 2020, Direct Compensation for Property Damage (DPCD) was introduced to provide Alberta drivers with an efficient way to process vehicle damage claims. If an accident occurs, you will work directly with your insurance company to process the claim.

Overview

Direct Compensation for Property Damage (DCPD) was introduced as part of the Automobile Insurance Reforms announced in October 2020. DCPD replaced the property damage portion of the third-party liability coverage on a driver’s auto insurance policy effective January 1, 2022.

The main intent of this change is to provide Alberta drivers with an efficient way to process vehicle damage claims.

If a driver is in an accident, they will work directly with their insurance company instead of the other party’s insurance company. This allows for a more efficient and customer-focused claims process. DCPD is part of the mandatory coverage for Alberta drivers.

DCPD changes who pays, not what is paid for.

What does DCPD cover?
DCPD vs. optional Collision coverage

DCPD coverage is mandatory. It covers your vehicle damage, damage to contents, and loss of use in the event you are not at fault for an accident or a portion of the repairs based on the percentage you were not at fault for an accident.

Collision and loss of use coverages are optional. If you are at fault, collision covers your vehicle repairs. Standard Endorsement Form #20 (loss of use) covers the loss of use.

Refer to Purchasing Insurance on our website for more information on the insurance coverages.

Damage to you and your vehicle

Regardless of who is at fault for the accident, your accident benefits coverages will pay for your medical and rehabilitation expenses.

If you are found 100 percent not responsible (not at fault) for an accident, any vehicle repairs will be paid for by your DCPD coverage.

  • If you have collision coverage, it will pay for damage to your vehicle even if you are 100 percent responsible (at fault) for the accident. It also covers the costs of towing, storage, and salvage disposal. You will have to pay a deductible – the amount you have to pay for repairs – before your insurance pays the rest.
  • If you do not have collision coverage, you will have to cover any costs for damage to your vehicle out of pocket. You will need to pay the percentage of the vehicle repairs equal to the percentage you are found responsible or at fault. If you are 50 percent at fault, you will pay 50 percent of the damages, and your DCPD coverage will pay the other 50 percent.
What are my responsibilities if I am involved in an accident?

If you are involved in an accident, it is your responsibility to:

1. Collect information on what happened, using the AIRB’s step-by-step guide on what to do and what information you need for insurance purposes.

2. Contact your insurance company to report the accident, regardless of whom is at fault.

How do insurers assess responsibility in an accident?

Many factors help your insurer determine responsibility (also known as fault or liability) in an accident.

Legislation covering the rules of the road, previous court cases, and information about the accident are all taken into account.

What information will insurers collect about the accident?

To determine responsibility, your insurer first needs to collect all details about the accident. If required, your claim representative will ask you what happened and get statements from other drivers, witnesses, and passengers.

Your claim representative may also:

How will your insurance premiums be affected?

If you are 100 percent not at fault in an accident, accessing your DCPD coverage will not adversely affect your claims history or result in higher premiums.

Your basic insurance premiums will likely increase if you are responsible for an accident. The costs for any optional insurance, such as collision, may also go up. In general, the more accidents you are responsible for, the more you will pay in insurance.

One key change under DCPD is you will pay a premium based on what vehicle you drive. Your insurer pays to repair your vehicle when you are not at fault. This is the main difference from the previous third-party liability property damage coverage, where your insurer was responsible for paying to repair someone else’s vehicle if you were at fault. There was no way for your insurer to know what other vehicle may be involved in an accident. So your third-party liability property damage premium was based on an average cost of repairs for the vehicle you may have had an accident with.

The certainty of the vehicle covered by DCPD allows for more precise pricing. Your insurer will use vehicle rate groups to price the costs to repair or replace your vehicle accurately. Vehicle rate groups classify vehicles based on the price of repairs and the likelihood of being involved in an accident. Generally, the lower the vehicle rate group, the lower the DCPD premium. The Insurance Bureau of Canada publishes data on each vehicle model and year’s rating.

All insurers were required to amend their rating program to reflect DCPD. Based on the mandatory filings received by the AIRB, with premiums for a $0 deductible, 15 percent of private passenger vehicle policyholders will see no change, 42 percent will see a decrease, and 43 percent will see a premium increase; as a result this change. Refer below for the change in premiums for motorcycles.

Deductibles will vary by insurer and vehicle category. Contact your insurance representative if you want to find out how deductibles may save you money and if they are right for you.

DPCD Resources

Website

Accident Examples

You may find it helpful to review accident examples based on the Direct Compensation for Property Damage Regulation, which your insurer’s claim representative uses to assess responsibility.