Car Insurance in Ontario, Changes to DCPD Coverage January 1, 2024

Starting January 1st 2024, Ontario auto insurance policy holders will have the option to remove Direct Compensation for Property Damage (DCPD) coverage from their car insurance policy. This coverage was previously mandatory.

Let’s delve into what these changes are and why it’s probably not a good idea to opt-out of this very important coverage.

First, What is DCPD?

Under the Ontario Auto insurance policy, DCPD allows Ontario policyholders to claim damages from their own insurer for vehicle repairs for not at fault accidents usually with no deductible.  This ensured that drivers could swiftly address vehicles damages without navigating the complexities of dealing with the at-fault party’s insurance provider.

Second, The Change

As of January 1, 2024, the Financial Services Regulatory Authority of Ontario (FSRA) has implemented an update in auto insurance policies for drivers in Ontario. This change allows drivers the option to opt out of their Direct Compensation Property Damage (DCPD) coverage by signing the OPCF 49 form. However, it’s crucial to understand that by doing so, drivers will also be opting out of both collision coverage and all perils coverage. These types of coverage are essential for protecting your vehicle in accidents where you are at fault. Therefore, fully understanding the implications of signing the OPCF 49 form is vital for making an informed decision about your auto insurance needs..

How Much is DCPD Coverage?

The amount a driver pays for DCPD coverage depends on many factors such as a driver’s personal driving record, type of vehicle, where they live and their claims history. It only represents a portion of the total car insurance premium. It is best to speak with a licensed Insurance Broker or Insurance Agent for your specific circumstance.

Real World Car Insurance Example

Imagine you’re driving through the streets of Toronto after declining DCPD for your Toronto Car Insurance. While stopped at a red light, another car rear-ends your vehicle. You are not at fault for this collision. However, since you opted out of DCPD coverage, your auto insurance will not cover the repairs for the damages to your car. Additionally, you will have to pay for any costs associated with towing your vehicle and any other expenses related to the accident such as storage of the vehicle. Without DCPD coverage, these financial responsibilities as well as dealing with the logistics of your now damaged vehicle fall entirely on you, even though you were not at fault in the accident.

Some other Considerations:

  • Leasing and financing companies will undoubtedly require that the vehicle carries DCPD coverage, such as they do standard collision and comprehensive coverage.
  • Post-COVID, we’ve witnessed notable delays in the availability of automotive parts, vehicles, and rental cars. These delays have led to increased costs for both services and parts required for vehicle repairs. Consequently, fixing a vehicle has become considerably more expensive, affecting individuals’ ability to maintain their daily commute to work.

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