Canadian Underwriter

Direct compensation for property damage coming to Alberta

December 13, 2021   by Canadian Underwriter Staff

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Amendments to Alberta’s Standard Auto Policy Form No. 1 will enable direct compensation for property damage (DCPD) for certain kinds of automobile property damage claims, starting January 1, 2022. The amendments were approved by Alberta’s Superintendent of Insurance.

Sharon Stefanyk, a partner at Field Law in Edmonton, explained this means “drivers who are not at-fault for an accident occurring on or after January 1, 2022, will claim from their own insurer for damage to their vehicle and its contents, instead of claiming from the at-fault driver’s insurance.”

Meanwhile, she added, “a driver who is at-fault for an accident will continue to claim from their own collision coverage.”

Rules related to DCPD do not prevent drivers from pursuing legal action for other damages, such as injuries arising from an accident.

Alberta’s new DCPD is designed to streamline the claims process for consumers by allowing applicable claims to be processed through a representative from their own insurance company. This, in turn, will minimize time spent pursuing subrogated claims.

“This change helps insurers set insurance premiums that better reflect actual repair costs,” said Stefanyk. “Cars that cost less to repair will typically have lower premiums and vice versa.”

The Insurance Bureau of Canada (IBC) has estimated DCPD means most drivers will see an increase or decrease of 5% or less in their premiums.

Approximately 18% of drivers will see more significant decreases in their premiums and approximately 9% of drivers will see more significant increases in their premiums, IBC said.

DCPD and similar programs have already been successfully implemented in eight other Canadian provinces.


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