Blog Direct Compensation Property Damage Insurance In Ontario

Dec 29, 2020

Man and woman at intersection after car accident

What You Need To Know About DCPD Coverage

Not familiar with direct compensation property damage or DCPD? Want to learn more about direct compensation coverage and how it impacts car insurance claims?

To help you better understand what is included, we have put together what you need to know about DCPD.

What Is Direct Compensation Property Damage Insurance?

Direct compensation property damage(DCPD) is a form of mandatory car insurance. It is included in all basic auto policies along with third party liability and accident benefits.

Direct compensation also refers to the way your claims are paid out. In Ontario, for all non at-fault accidents, you will be compensated directly by your insurer.

How Does DCPD Work?

Gray car with front end damaged after a collision

DCPD insurance provides you with compensation when you or your car is damaged in an accident that you didn't cause. It is called direct compensation because you deal directly with your insurer.

Essentially, it means you deal with your insurer for all no-fault insurance claims. You won’t have to wait on the other driver’s insurer to make a determination to process your claim. You also won’t have to sue the at-fault driver to recover damages and you will be compensated directly.

What Are The DCPD Rules In Ontario?

There are four criteria that must be met to use DCPD insurance :

  1. Not at-fault : You must not be at-fault for the accident. Fault determination rules under the Insurance Act are used to assess who caused the collision.
  2. Vehicles involved : One or more vehicles must be involved in the accident.
  3. Insured : All vehicles must be identified and insured.
  4. Location : The accident must happen within Ontario.

When all of these situations apply, it will enact direct compensation coverage.

Are All Non At-Fault Accidents Covered Under DCPD?

No. There are certain situations where non at-fault accidents are not claimed under DCPD, such as hit and runs. This will be filed through your collision insurance .

Similarly, if you are involved in an accident with an uninsured driver and are not at-fault, the claim will be filed under the uninsured automobile section of your policy.

Is There A Direct Compensation Property Damage Deductible?

No, most policy holders do not have an deductible for direct compensation property damage insurance and claims. This is the case because you are not at-fault. However, in the case of part of your claim falling under collision, you will be required to pay the deductible.

For example, if you are found to be 20% at-fault, 20% of your claim would fall under collision and 80% under DCPD. This means you would also be required to pay 20% of your collision deductible. If your deductible is $1000, you would have to pay $200.


Direct Compensation Property Damage Insurance FAQs

No. There is not an option to increase or add additional DCPD coverage.

Direct compensation agreements exist to help improve and simplify the claims process. In the past, if you were involved in a not at-fault accident your insurer would pursue the other drivers insurance company to recover damages. This often was long lasting and caused claim payouts to be delayed.

No. Ontario is one of a number of provinces that offer direct compensation property damage insurance.

DCPD is also available in the following provinces :

  • Nova Scotia
  • Prince Edward Island
  • New Brunswick
  • Quebec

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