Motorists in Ontario can now opt not to purchase direct compensation property damage (DCPD) coverage amid changes to insurance rules that have rolled out in January.
Without the coverage, drivers will not be reimbursed for vehicle repairs, loss of a vehicle or its contents, or a replacement vehicle, among others.
DCPD coverage protects car owners from costs related to vehicle damage from a collision if they are not at fault. Experts have warned about the risks of opting out of coverage.
“If the described vehicle is damaged in a collision the loss will not be compensated even if you are not at fault,” the opt-out form warns.
“You will not be compensated by this insurance policy or by anyone else, including anyone at fault for causing the damage or their insurance company.”
A spokesperson for the Ministry of Finance said the move is an “important change the government is making to give drivers more options,” which could be useful for drivers of older cars that are worth less than the cost of their insurance.
The changes in the insurance rules are also part of a wider multi-year strategy announced in 2019. The plans announced include electric-proofing insurance, changes to rate regulation, and offering more discounts and options.
But Morgan Roberts, director of RH Insurance, said average drivers are not likely to glean significant savings.
“You're opting out of any coverage in the event of… a not-at-fault-accidents,” she told CTV News Toronto.
“If you're not at fault for an accident that happens, you're not going to be reimbursed for [the] replacement value of the vehicle. No loss or damage. There won't be any repair costs, towing costs, anything like that. You're opting out of all of it.”
A Ratesdotca report said insurance premiums in Ontario spiked by about 12% in 2023 compared to 2021, with the average at $1,766. Premiums are particularly high in the Greater Toronto Area, with costs reaching $2,000 in Vaughan, Richmond Hill, Mississauga, Toronto, and Brampton.
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