Not all provinces have the same rules when it comes to settling insurance claims after vehicle collisions. Here’s how the systems work.
Background
Traditionally, when two vehicles collide and fault is determined, the insurance company of the not-at-fault party would seek compensation from the other driver’s company. Anyone who’s been through that knows it can be adversarial, not to mention tedious and time-consuming.
This is why, in recent years, some provinces (Ont., Que., N.B. and N.S.) have imposed Direct Compensation(DC)rules for payment resolution. Basically, this means that each company compensates its own insured party, the principal aim being to speed up recovery and minimize legal conflict.
It’s sometimes referred to as DCPD, which stands for Direct Compensation Property Damage — a reminder that this protocol only applies to property damage and not to personal injuries, which are handled like they are in other provinces.
General rules
Direct Compensation is a mandatory component of your vehicle’s insurance package in some provinces. It is applicable when two or more separately insured vehicles (or the load being carried by either) are involved in an accident. If, for example, two vehicles from the same commercial fleet were involved in a collision, DC does not apply because only one insurer would be involved.
Determining fault
Even though the source of post-accident payouts may be different, the notion of fault remains. It’s still a good idea to document as much as you can at or near the accident scene while it’s fresh, including photographs and notes of your immediate recollections of what happened. After that, however, it’s between the two insurance companies to determine who’s at fault. The Insurance Act in each DC province has its own formula for deciding that, called “Fault Determination Rules,” in which responsibility for causing the accident is not necessarily all or nothing. A driver may be deemed 25 or 50 per cent at fault as well as zero or 100 per cent.
Consequences of fault
If the accident is ruled 100 per cent the other driver’s fault, you will not have to pay your deductible. But if you are deemed partially at fault, the deductible you pay will be prorated accordingly. If you’re totally at fault, your insurer is not obliged to repair your vehicle at all — unless you have purchased collision coverage in your overall package. Ask your broker if that’s suitable for your vehicle and driving habits.
Legal challenges and arbitration
Let’s say you disagree with the fault determination in your case. You have the right to appeal to the arbitration board in your province. Failing that, DCPD does not override your right to bring a civil lawsuit to bear on any party. In either of those cases, however, you’ll want to consult a lawyer as to the advisability of that strategy.
