DCPD Insurance: What It Is And What It Covers

Alberta adopted a Direct Compensation for Property Damage (DCPD) system on January 1, 2022, a type of insurance that’s designed to simplify collision auto claims. DCPD comes into effect when an incident occurs and is a part of an auto insurance policy that includes third-party liability, uninsured auto insurance, and accident benefits.

Since DCPD is fairly new to the province, many auto insurance policyholders have questions about what it covers and how it helps ease the burden of the claims process. In this article, we cover what you need to know about DCPD insurance. If you can’t find what you’re looking for, our knowledgeable Alpine insurance brokers are here to answer your questions!

What is Direct Compensation Property Damage?

Direct Compensation Property Damage is a type of insurance that automatically covers your repair bills after an accident that you’re not at fault for. DCPD coverage pays you directly and your insurance company will request for the reimbursement from the driver’s insurance. This reduces the hassle for everyone involved, speeds up the resolution of claims, and can help save money for auto insurance policyholders.

The benefits of DCPD

1. A more efficient and fair process – DCPD reduces the hassle for the driver who is not at fault with the cost of repairs reimbursed from the insurance company of the at-fault driver. This means you don’t have to wait for someone else’s insurance company to start the repairs process.
2. Provides transparency – Because the insurance company of the driver who is not at fault is reimbursed, DCPD regulation makes it clear who is responsible for the accident which helps speed up claims resolution.
3. Helps save vehicle owners money– Owners of cars that cost less to repair will pay less for insurance, 42% of auto insurance policyholders will see a reduction in premiums, and the system is part of a strategy to help improve long-term sustainability of auto insurance premiums in Alberta.
4. It’s proven successful in other parts of Canada – Alberta is not the first to adopt the DCPD system which has already been implemented in almost every province across the country. The outcome is favourable and proven to be effective.
5. Does not impact a person’s right to sue – Under the existing system, a consumer has the right to sue for other damages such as injuries and time off work. This right is not impacted by DCPD.

What is and what isn’t covered by DCPD

DCPD covers property damage and the cost of car repairs as a result of an automotive accident. Because it kicks in when you’re not at fault, it comes with a zero deductible.

Unfortunately, DCPD does not cover a hit-and-run accident, which is a separate and optional coverage at an extra cost under collision insurance. Speak with an auto insurance broker in Alberta to learn more about optional coverages that you can add to your current auto insurance policy.