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DC-PD: What Is Direct Compensation-Property Damage Insurance?

June 11, 2021
4 mins
A senior woman sits next to a senior man and points at a computer with a worried look on his face

There are four mandatory components to every basic car insurance policy in Ontario. They are third-party liability, accident benefits, uninsured auto and direct compensation-property damage (DC-PD). DC-PD? That’s a head-scratcher. Despite the somewhat confusing moniker, DC-PD is the portion of your policy whereby your insurer compensates you directly when your vehicle is damaged in an accident for which you are not at fault. It covers you for the damage to your vehicle, its contents, and the loss of use of your vehicle.

As part of Ontario’s no-fault insurance system, DC-PD takes the onus off you to seek compensation for damages, because your insurer will pay you for the repairs needed.

But there are criteria in Ontario that must be met for your DC-PD protection to kick in:

  1. You are not at fault or not entirely at fault for an accident.
  2. The accident occurred in Ontario.
  3. The accident involved at least one other vehicle.
  4. The vehicles involved in the accident must be identified and legally insured in Ontario.

Other than Ontario, DC-PD is also mandatory for auto policies in New Brunswick, Newfoundland and Labrador, Nova Scotia, Prince Edward Island, and Quebec. Alberta is implementing DC-PD as part of that province’s auto insurance reforms as it inches toward a no-fault insurance system.

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Does DC-PD cover all not-at-fault accidents?

No, DC-PD doesn’t factor in some situations. For example, if you are the victim of a hit-and-run. Should that happen, and you don’t know who the other driver was, it is your policy’s collision insurance that will reimburse you for damages provided you have this optional type of coverage.

Another example where DC-PD would not apply would be if you get into a collision with an uninsured motorist. If you are not at fault for the incident, it is your policy’s mandatory uninsured auto protection that will pay for damages.

The good news is most insurance policies do not have a deductible you must pay for filing a DC-PD claim. But if that claim turns out to be a collision claim, you will be required by your insurer to pay a deductible.

Suppose you are found to be partially at fault for the accident, does DC-PD still apply? The answer is both yes and no. Let’s say it is determined you are 50% at fault but 50% not at fault. If that’s the case, half of your claim is filed as a collision claim, and half would be a DC-PD claim.

Also, DC-PD does not apply if the collision you were in occurs in another province or the U.S., or if the at-fault driver lives in another province or stateside.

Why is DC-PD coverage necessary?

DC-PD expedites an auto claim by making it possible for drivers who are not at fault for a collision to be compensated quickly without having to wait. Before DC-PD was enacted in Ontario, drivers whose vehicles were damaged in an accident by another driver who was at fault would have to wait to be compensated.

How else can I protect my vehicle?

The best way to ensure you have adequate coverage to protect yourself from the cost of an accident is to add optional collision insurance to your policy. It pays for damage to your vehicle if you’re in an accident with another car, or if you hit a stationary object like a streetlight or road sign. If you don’t have collision coverage and are involved in an accident, you will be solely responsible to pay for damage to your vehicle or to replace it if it’s a total loss.

It’s also worth your while to compare policies and premiums to find the coverage you need at the best price you can find from a broad range of insurance companies.

Liam Lahey

Liam Lahey is a versatile marketer with experience as a staff and freelance writer for many business and technology publications and newspapers. He previously worked as the editor and media spokesperson for RATESDOTCA, handling home, auto, and travel insurance topics.

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