DCPD & The New Alberta Auto Reform
What you need to know about DCPD coming January 1 2022.
DCPD & The New Alberta Auto Reform
By Christina Kelley
Here’s what you need to know about DCPD & The New Alberta Auto Reform. Changes are coming to the way claims for vehicle damage are settled in the province, and
Albertans who are not at-fault in a motor vehicle collision will soon be able to turn to their own
insurance companies for help rather than relying on a third party provider.
The new Alberta auto reform takes effect on January 1, 2022, and under the new legislation,
Direct Compensation for Property Damage (DCPD) replaces the existing property damage
portion of the third party liability coverage on your automobile insurance policy.
What is Direct Compensation for Property Damage (DCPD) Insurance?
DCPD is designed to enhance the consumer experience by improving the way insurance
companies are able to support their customers. DCPD is a part of the mandatory automobile
insurance and applies to all private passenger, recreational and commercial vehicles insured in
Under the new system, Albertans who are considered not at-fault in a motor vehicle accident
are able to seek compensation for damages to their vehicle and vehicle contents, as well as
coverage for loss of use or replacement transportation from their own insurance providers.
This reduces the need for subrogation (and other formalities) between insurers which means
claims will be handled in a more timely and efficient manner.
Beyond Advice: Not all not at-fault collision losses will be covered under DCPD Insurance. Examples
where this is the case include claims arising from a hit & run, collision with an uninsured vehicle, or
accidents involving two vehicles both owned by the same person. In each instance, damage to the
insured vehicle is only covered if Physical Damage (Collision and/or Comprehensive) coverages have been
purchased by the vehicle owner prior to the loss occurring.
What happens if I’m deemed at-fault or partially at-fault in a collision claim?
DCPD Insurance responds to the same extent a driver is found not at-fault in a motor vehicle
collision. This means that insurance providers will be required to cover 100% of the vehicle
damage claim for a driver who is deemed 100% not at-fault for the loss.
Where a driver is found to be at-fault for a collision loss, DCPD will respond to the portion of
the vehicle damage claim equal to the same percentage that driver is considered not at-fault,
and in these cases, optional Collision coverage is required to cover the remainder of the claim.
Take a look at the following claim example:
- Driver A and Driver B are both involved in the same motor vehicle collision causing
damage to each of their vehicles.
- Driver A is found to be 25% at-fault for the loss and Driver B is deemed 75% at-fault.
- Driver A chose to purchase the optional collision coverage prior to the accident taking
place. On the other hand, Driver B chose to decline the optional collision coverage.
- Since Drive A chose to purchase the optional collision coverage, DCPD Insurance will
respond to cover 75% of the vehicle damage claim. The remainder of the claim (the
portion equal to the 25% at-fault determination) will be covered under the optional
collision coverage and subject to a collision deductible.
- For Driver B who chose to decline the optional collision coverage, DCPD will respond to
cover 25% of his/her vehicle damage, and the remainder of the claim (equal to the
percentage at-fault) will be paid out-of-pocket.
Following a collision, your claims adjuster will gather and review every detail of the accident
including police reports, witness statements and consultations with the examiner who assessed
the vehicle(s) for damage. After review, fault will be allocated based on these details and the
DCPD Fault Determination Rules.
How will the new system affect my automobile insurance premiums?
Under the new DCPD system, insurers are no longer responsible for paying for damage to
vehicles they don’t insure. This is the most significant change as it removes uncertainties and
allows insurers to deliver a more precise and accurate pricing model to the consumer with
premiums for DCPD coverage based on the costs associated with repairs to the specific vehicle
Stated simply, Albertans who own inexpensive vehicles will pay less for DCPD coverage than
those who own expensive vehicles with higher repair costs.
To discover how your vehicle compares to others on the road, check out the Insurance Bureau
of Canada’s annual publication: How Cars Measure Up
Claims made under DCPD will have no adverse affect on premiums.
Beyond Advice: While insurance providers are required to provide DCPD coverage with a $0 deductible,
many insurers have chosen to implement deductible options which can be applied to lower premiums.
When considering deductible options for DCPD coverage, it’s important to keep in mind that the
legislation prevents the policy holder from recovering the deductible from an at-fault driver when a claim
Do I need to contact my agent before these changes take affect?
Albertans are not required to do anything before DCPD takes affect on January 1, 2022. The
legislative changes will be considered automatically written in to all existing Alberta automobile
Be sure to reach out if you have any questions. We are your insurance industry partner and we keep on top of changes in the industry.
Let us help you navigate these changes, we are experts in creating gap-free protection plans and are here to offer guidance in any phase of your decision-making process.