Everything you need to know about Alberta’s new auto insurance system

Since January 1, Alberta drivers are compensated by their own insurance company for no-fault accidents

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On January 1, Alberta became the last Canadian province to set up a “direct compensation for material damage” (or DCPD) car insurance model, following in the footsteps of Ontario, Quebec, Nova Scotia, New Brunswick, Newfoundland and Labrador and Prince Edward Island.


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The DCPD requires insurers to compensate drivers who end up in no-fault crashes, a change that the Insurance Bureau of Canada (IBC) says could lower premiums for 42 per cent of drivers in the province.

What exactly does the change mean for drivers in Wild Rose Country? “For the majority of drivers, DCPD will reduce their premiums or see no change,” the IBC said. says on its website.

Here’s a quick look at what a DCPD model really means for your fare – and whether you’ll be one of the lucky drivers who pays less each month for auto insurance in Alberta.

What is Direct Compensation for Property Damage (DCPD)?

If you are driving in a car accident that is not your fault, your insurance company will automatically cover the repair costs. He will then be responsible for organizing the reimbursement by the insurers of any other driver involved in the accident. “It’s really just a process of streamlining how a claim is handled in the future,” said Jaime Tempeny, branch manager at Westland Insurance, in an interview with CTV News in December.


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After an accident, DCPD covers basic property damage (for example, a broken fender or broken windshield), any contents inside the vehicle that are damaged, and loss of use of the vehicle.

According to Alberta Automobile Insurance Rates Board , drivers of a DCPD model will not pay these expenses if they are found not to be 100% responsible for an accident. Perhaps most important for drivers, DCPD is mandatory for auto insurance policies in jurisdictions that implement it, so you’ll be covered no matter who insures you.

Alberta’s old insurance model could be particularly aggravating. Prior to January 1, drivers who were not found to be at fault in an accident had to sue another driver’s insurer in court for compensation – a long and costly process for anyone. (Although, as the IBC points out, drivers can still sue for injuries under a DCPD model.)


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Will car insurance rates for Albertans drop because of the DCPD model?

The answer really depends on the price of your vehicle. As the IBC explains on its website, DCPD is supposed to better align a driver’s insurance premium with repair costs.

“This means that, generally, owners of cheaper vehicles that cost less to repair will pay less for their insurance,” according to the IBC. “Similarly, owners of more expensive vehicles that cost more to repair may pay more.”

The IBC estimates that 42% of drivers will see a rate reduction as a result of DCPD, while around 15% will see no change in their premium. At the other end of the scale, around 34% of drivers could see their premium increased by up to 5%.


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What is not covered by Direct Compensation for Property Damage?

DCPD only covers drivers who are not at-fault in an accident – drivers who want at-fault accident cover will still need to purchase collision insurance.

Unfortunately, DCPD cannot help drivers who are victims of hit-and-runs (your insurance company cannot bill a third party if their insurer cannot be found).

Alberta’s new DCPD model may seem unfamiliar to drivers used to the process of direct billing to a third-party insurer, but IBC says it will eventually make the post-crash insurance process easier.

LowestRates.ca is a free, independent rate comparison website that allows Canadians to compare rates from over 75 providers for various financial products, such as home and auto insurance, mortgages and credit cards.


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