Understanding DCPD coverage

Getting into a car accident is already stressful enough. Trying to understand how auto insurance works in Ontario can be another headache altogether. When you get into a car accident, your first instinct may be “This is the other guy’s fault; I’m going to sue him for damages to me and my car”.

Fortunately for you, that’s not how auto insurance works in Ontario.

This is because how auto insurance actually responds when you get into a car accident with another person in Ontario is actually a better option for policyholders than the costs and stresses of going through the motions of people suing each other for damages.

Direct Compensation-Property Damage (commonly known as DCPD) covers damage to your vehicle, its contents, and for loss of use of your vehicle if another person was at fault for the accident. It is called direct compensation because even though someone else caused the damage, you collect directly from your own insurance company.

However, coverage under DCPD only applies if the following conditions are met:

  • The accident took place in the province of Ontario.
  • There is more than one vehicle besides your own that was involved in the accident.
  • At least one of the other vehicles is also insured by an insurance company that is licensed in Ontario or has signed a special agreement with the Financial Services Commission of Ontario (FSCO) to provide DCPD coverage.

There are of course many situations beyond one’s control that do not make it possible for you to claim recovery under DCPD. Perhaps the other driver is from another province, or  from the United States. In those instances, you can make a claim under the optional Collision coverage if you happen to have it, whether or not you are at fault.