If you drive a car on Canadian roadways, you’ll need an auto insurance policy to accompany you. It’s against the law not to have a policy in place. But even if it wasn’t mandatory, car insurance can prove to be very helpful if you’re ever involved in a car accident, as paying for damages — as well as any potential litigation — can be very expensive.
Depending on where you live in Canada, you may have access to direct compensation property damage (DCPD) insurance, which comes standard with a conventional car insurance policy. Let’s go into a little more detail about what DCPD is and what it covers.
DCPD is a type of auto insurance policy in which the insurance provider pays to have a damaged vehicle repaired after an accident, regardless of who is at fault. As such, it’s part of the ‘no-fault’ insurance system and comes standard on all auto insurance policies in specific provinces, including Quebec, New Brunswick, Nova Scotia, Newfoundland, and PEI.
DCPD is also available in Ontario, however, as of January 2024, this coverage has become optional for Ontario drivers.
In the event of an accident, DCPD will kick in to provide coverage for damage done to your vehicle. There’s usually no deductible required to have repairs to your vehicle done.
Repairs are not covered in every type of incident with DCPD. For instance, if you’re involved in a hit-and-run, DCPD will not provide coverage. For this type of incident, collision insurance will be required to receive any coverage for damage done.
DCPD insurance offers financial compensation if you are injured or if your vehicle is damaged in a car accident that was not your fault. It is named as such because you deal directly with your insurance provider; thus, the entire claim process can be expedited as a result.
There’s no need to wait for the other motorist’s insurance company to decide how to proceed with the claim. And you won’t have to take the at-fault driver to court to recoup any damages. Instead, you’ll be compensated directly.
An auto insurance policy is mandatory in Canada, with certain components that are part of a standard policy, and others that can be added on for additional coverage.
Mandatory auto insurance in a no-fault insurance system includes the following:
How does coverage compare between DCPD and a standard auto insurance policy? More specifically, how are you covered under each policy based on whether or not you’re at fault for an accident? The following chart will compare the two when it comes to coverage:
| DCPD | Standard Insurance | |
| You’re at fault | No coverage | Covered |
| You’re not at fault | Covered | Covered |
Collision insurance isn’t required by law. But it can come in very handy if you’re ever in a car accident if your car or another driver’s car is damaged. In some cases, the lender providing the car loan may require collision coverage.
If a car accident is not entirely one driver’s fault, the blame can be financially split accordingly. For instance, an accident that was caused by the negligence of both driver’s coverage can be divided based on the share of blame. If it’s determined that you and the other driver are both 50% at fault, then half of the damage done to your car could be covered by DCPD, while the other half would fall under your collision policy, if you have one.
It can be tough to determine whether or not you’re covered in the event of a collision, particularly if you’re at fault. The following chart outlines if you are covered or not depending on who’s at fault and if you have collision coverage:
| With Collision Insurance | Without Collision Insurance | |
| You’re at fault | Covered | No coverage |
| You’re not at fault | Covered | Covered |
If you’re ever involved in an accident, regardless of whose fault it is, you’ll want to file a claim right away. Of course, if someone has been hurt, police and paramedics should be called first. But a call to your insurance claims department should be made shortly after. If you wait too long to file a claim, you may not be entitled to your policy’s available coverage.
Be sure to take photos to document the damage to your car to help your insurance company more accurately assess your claim and how much coverage to provide. Don’t take your car into a body shop until the damage has been fully documented; otherwise, your insurance provider won’t be able to assess the damage done to your vehicle if the repair process has already begun.
Once you file a claim, a claims adjuster will review your file. You may be asked to fill out a proof of loss form which verifies the claim. The form requires details of the damage to your car and the expected cost to either fix or replace your vehicle. If your claim is approved, you’ll be paid out the applicable compensation amount shortly after.
