Auto insurance is a critical safety net for drivers in Ontario, providing financial protection in the event of collisions, or other unexpected incidents on the road.
Among the coverages available, Direct Compensation Property Damage (DCPD) insurance holds a unique position. DCPD is compulsory, but in January 2024 customers will be able to opt out of the coverage.
Now, drivers should be made aware that DCPD is key in providing them with immediate compensation for repairs after a no-fault collision with a third party.
Other provinces that have made DCPD a standard insurance practice include Quebec, Nova Scotia, New Brunswick, Newfoundland and Labrador, Prince Edward Island and Alberta.
As opting out of DCPD will be new to Ontarians, we’ll clarify the nuances of this insurance coverage; what it entails, how it differs from standard liability coverage, and its significance in safeguarding your financial interests in the aftermath of a collision.
What is DCPD Insurance?
DCPD ensures your insurance company covers damages to your vehicle if you’re involved in a no-fault collision with a third party.
What sets it apart from standard liability coverage is that it allows you to claim compensation directly from your insurance provider for property damage, but only when a third-party driver is at fault.
This feature is particularly valuable because it streamlines the claims process and ensures that you don't have to rely on the other party's insurance. Unlike traditional liability coverage, where you typically claim compensation from the at-fault party's insurance, DCPD enables you to seek compensation from your insurer.
What does DCPD coverage include?
DCPD insurance encompasses two primary coverage components:
- Coverage for Your Vehicle and Property Damage: DCPD provides financial protection for the repair or replacement of your vehicle and any property inside it that gets damaged in a collision.
- Compensation of Loss of Vehicle: While your car is being repaired, DCPD covers the cost of a rental vehicle or public transit expenses.
Customers can purchase DCPD with or without a deductible with Onlia. The options are $0, $300 and $500. If an insured is 0% at fault, they’ll be compensated based on that deductible. If an insured is 100% at fault, there is no coverage under DCPD. However, the insured will be compensated under collision coverage — if purchased.
For example, if an insured is 25% at fault, then DCPD will pay 75% of the claim, apply 75% of the DCPD deductible, plus collision, if present will pay 25% of the value of the claim, minus 25% of the collision deductible.
Changes to DCPD insurance in Ontario
DCPD insurance eligibility varies by region and insurance provider.
Come January 1, 2024, drivers can opt out of DCPD by signing the Ontario Policy Change Form 49, or OPCF 49 for short. The option for customers was enacted by the provincial government in an effort to help Ontarians save money.
If you’re involved in a no-fault collision and have opted out of DCPD, you will not be reimbursed for:
- Damage to your vehicle
- Value of the vehicle
- Loss of vehicle use
- Vehicle replacement
- Personal contents in the vehicle