August 10, 2015 by Canadian Underwriter
The Government of Prince Edward Island has taken steps to simplify the claims process for vehicle repairs by having Islanders deal only with their own insurance companies following an accident.
Enacted in the spring of 2014, insurance reform known as “Direct Compensation – Property Damage” (DCPD) will take effect Oct. 1, 2015 and apply to accidents occurring on or after that date. It is mandatory coverage.
The new rules require that insurance companies compensate their own customers for damage to a vehicle and its contents caused by someone else, notes a statement last week from PEI’s Department of Justice and Public Safety.
This means that said drivers will no longer have to “contact the at-fault driver’s insurer for compensation,” PEI Superintendent of Insurance Robert Bradley says in the statement. “This change will improve the experience for drivers and simplify the claims process, so Islanders can get their vehicles back on the road more quickly,” Bradley continues.
“Under DCPD, consumers will be required to settle their property damages with their own insurer regardless of fault. DCPD will cover the portion for which you are not at-fault. Collision coverage, if you choose to purchase it, will cover the portion for which you are at-fault,” notes a government backgrounder.
Beyond meaning consumers only have to deal only with their own insurer to settle property damage claims, “DCPD is also beneficial to both consumers and industry, because it simplifies the administrative process, which speeds up the claims process,” the backgrounder adds.
Islanders who are now dealing only with their own insurers for property damage claims, however, still need to obtain all parties’ insurance information immediately following an accident (since the information will be important in settling one’s claim), as well as, if they wish to have vehicle damage covered that is judged to be their fault, purchase collision coverage.
Although the change takes effect in October, the statement notes that starting in August, Islanders will see the new section (Direct Compensation – Property Damage) on their respective auto insurance renewals.
DCPD has previously been implemented in Nova Scotia, New Brunswick, Quebec and Ontario. Emphasizing that DCPD is not “no-fault” insurance, “just like the old system, fault must be determined as at-fault accidents may affect your rates,” the backgrounder states.
“Insurers will know exactly what type of vehicle they will repair or replace in the event of an accident. Therefore, there will be some rate offset amongst consumers depending on the value of their vehicles,” it points out. “Consumers with more expensive vehicles may pay a little more and consumers with less expensive vehicles may pay a little less.”
With regard to exceptions to application of DCPD, the backgrounder explains that under the “Fault Determination Regulations, where the driver of one of the vehicles is charged with certain driving offences and the driver of the other vehicle is at least partially at-fault under the regulation, the degree of fault will be determined as in the old system.” Where DCPD does not apply, the accident will be settled under the old system.