New Option for Auto Insurance – Be careful!!
The government will be implementing a new option for your auto insurance as of January 1, 2024. You may be surprised to hear that not all options the government gives you are good ideas.
There is a section in the auto policy called DCPD or “Direct Compensation Property Damage”. This is the part of the policy that provides coverage for you if you are in a not at fault accident. As of January 1, 2024 this will become an optional coverage that can now be removed, HOWEVER in removing this coverage, your Collision coverage (used in the case of an at fault accident) will also be removed.
The motivation behind this new option is to offer Ontarians more flexibility and potentially reduce their monthly premiums. However, making this choice could entail substantial out-of-pocket expenses for drivers if they find themselves in an accident even where they are not at fault.
Most people don’t feel totally comfortable gambling that they will not have an accident so they carry collision coverage to cover the cost of repairing or replacing their vehicle. If you remove DCPD you are gambling that everyone else on the road is a good enough driver that they won’t hit you and cause you to have to pay for your own repairs or replacement.
It’s always a good idea to look at your insurance and speak to your broker to look for potential savings – and there are options available, however we don’t feel that removing DCPD is a great option for very many people.
Look for notices from your insurance company as your policy renews, it is called the OPCF 49. If you have more questions about it – just ask us, we’re always happy to talk about insurance!