On Jan. 1, 2022, Alberta will implement a direct compensation for property damage system that effects all car insurance policy holders in the province. Experts in the industry are saying that the change should help provide some savings for vehicle owners, which would be a welcome respite from several years of rising insurance rates. The average Albertan has seen their auto insurance rates rise approximately 22% since the beginning of 2019. The switch to a direct compensation for property damage system, also known as DCPD, is the result of the passing of Bill 41: Insurance (Enhancing Driver Affordability and Care) Amendment Act, 2020 a year ago.
DCPD is more fair and a better way to support customer needs, says the Insurance Bureau of Canada (IBC), and is already in use in most other provinces. Thoroughly tested and proven successful in many other jurisdictions, DCPD should help streamline processes following a collision.
What changes can I expect with DCPD?
Vehicle owners don’t need to worry about doing anything themselves on Jan. 1. Moving to DCPD does not change anything about drivers’ car insurance coverage – it only pertains to which insurance company will pay for damages after an accident. Traditionally in Alberta, if a driver is not at fault in an accident, such as if you were rear-ended or someone hit your parked vehicle, the payment for repairs came from the at-fault driver’s insurance company. With DCPD, payment for damage will be provided directly from your own insurer rather than the other party’s. The IBC explains that DCPD helps reduce the overall cost of insurance by removing several slow and expensive steps from the car insurance claims process. Insurance providers are able to reduce the red tape for their customers by not having to demand payment from another company, and payments will be made more quickly and with less hassle. Your claim amount will cover the repairs to your vehicle, allow for compensation for loss of use (such as the provision of a rental car), and compensate for contents and belongings that were damaged in the accident. Vehicle owners will also be able to choose exactly which repair shop they want to take their car to for repairs, which was often a cause of disagreement for those having to deal with the usual claims process.
How will DCPD affect my car insurance rates?
The IBC predicts good news for owners of vehicles that cost less to repair. Under a DCPD structure, owners of vehicles that are not valued excessively high and are not overly expensive to fix should see a reduction in their insurance payments. Those who own high-value vehicles that are extremely costly to repair will likely see an increase. This results in a more equitable system for everyone.
The IBC estimates that 42% of drivers should be presented with a lower car insurance estimate come renewal time, and 15% will not see any change at all. The rest – 34% of drivers – could see a car insurance rate increase of from 0% to 5%.
The right to sue and the minor injury regulation
DCPD does not take away anyone’s right to sue another party due to injuries incurred due to an accident for which they were not at fault. If you have been hurt in an accident, be sure to let your insurance provider know.
Additional changes brought about by Bill 41: Insurance (Enhancing Driver Affordability and Care) Amendment Act, 2020 relate to the minor injury regulation, which formerly excluded such injuries as sprains, strains or whiplash-associated disorders. These are now qualified as minor injuries for which damages payable are capped at $5,000.
At the same time, Bill 41 increased the different types of treatments a person is able to access for minor injuries. Those who have a designated minor injury under the legislation will now be able to involve dentists, occupational therapists, and psychologists in their recovery.
When it comes to litigation, the number of experts accessible for motor vehicle accident claims is now limited, however. For claimed damages of $100,000 or less, each party may only bring in one expert witness. For claimed damages of $100,000 or more, parties may call in a maximum of three expert witnesses. If all parties consent, one or more additional experts can be called in, and joint experts can also be called.
Ask Lane’s how we can help lower your car insurance rates
If your car insurance rates have skyrocketed, your best bet is contacting experienced insurance brokers such as us at Lane’s. We work for you, not the insurance companies, and are your ally in the insurance business. It’s our job to find you the best car insurance coverage at the lowest possible rates out there.
It doesn’t take long to get a fast and free car insurance quote from us. Give us a call at our Calgary, Banff, Edmonton, or greater Alberta offices so we can shop through the policies provided by our trusted providers and help reduce the cost of your coverage.
