If you’ve been in a vehicle accident—our sympathies. No matter who is at fault or what the outcome is, collisions are always stressful and can be costly. Exactly how we bear those costs, however, seems to be a matter of great confusion.
One particular point of misunderstanding is how deductibles work if the accident wasn’t your fault. It’s a question we hear time and time again. The short answer is: it depends on a few things. The determination of whether or not you’ll be responsible for the deductible relies on a number of factors.
Direct Compensation Property Damage and You
When you’re not at fault for a collision, your insurance company typically covers damages to your vehicle under the Direct Compensation Property Damage (DCPD) section of your policy. If your insurance policy has a $0 deductible for Direct Compensation Property Damage claims, you won’t need to pay a deductible. This, however, depends on the province you live in. Residents of Ontario, Quebec, Nova Scotia, New Brunswick and PEI all qualify to make Direct Compensation Property Damage claims and won’t be required to pay a deductible.
Having said that, there are restrictions to the DCPD section of your policy. If you’re involved in a collision with a vehicle that is insured by a company that doesn’t sell insurance in the province where the collision took place, or the company has not agreed to follow the DCPD rules, your insurance company will not cover you.
When Direct Compensation Property Damage Doesn’t Apply
Let’s say you live in a province where Direct Compensation Property Damage rules apply but you’re driving in a place where DCPD does not apply, your insurer will cover damages to your vehicle resulting from a collision that wasn’t your fault. However, you will be responsible for the collision deductible. Once your claim is paid out your insurance company will usually seek reimbursement for the deductible from the insurer of the other vehicle.
In many cases, the other driver’s insurance company will agree to pay the damages up-front. In which case, your insurance company will likely waive your deductible altogether. Either way, because you were determined to be not at fault, your premiums should not be affected.
What About a Hit and Run?
Unfortunately, if you’re the victim of a hit and run collision, damage to your vehicle will not be covered under Direct Compensation Property Damage, but under the collision section of your policy instead. Due to the nature of hit and run accidents, your insurer will not be able to identify the other driver, which means they won’t be able to identify the kind of coverage they have—thus meaning that you’ll have to pay your collision deductible.
Your Questions Answered
After being involved in a collision, the last thing you want to do is try to figure out coverage and deductibles. Due to all the variables involved, it can be confusing and even frustrating for everyone involved. This is where we come in. We’ll help answer all your questions and concerns, and get you back on the road with confidence. Contact a Regal Insurance broker today.