What’s New About Alberta’s Auto Insurance Act?


What’s New About Alberta’s Auto Insurance Act?

Normally in case of an accident if your vehicle has suffered any physical damage, then the cost of repair is claimed from the insurance company of the person who is responsible for the damage. Government of Alberta made some changes in the Insurance Act that impacted the claim related rules and regulation in case of damage caused because of an accident.
Major changes are:
  1. As per changes made, you can claim the damage caused because of an accident directly from your insurance company. 
  2. You can claim for any type of physical damage caused to the vehicle, any type of changes occurred in the usage of vehicle and if any object placed inside the vehicle is damaged due to accident. 

Why New Model was Launched?

In the year 2020, an expert committee conducted a review of Alberta’s auto insurance policy with an aim of increasing benefits for Alberta’s citizens. After the review, the committee suggested a few improvements in an existing auto insurance policy. The points highlighted by the committee were considered while designing the new model.
Last year, the government of Alberta made a few changes to the Insurance Act. The changes made are specific to accidental claims. The changes were incorporated and the new insurance act comes into effect from January 1, 2022. The change will allow for direct compensation for property damage claims, which includes coverage for your vehicle damage, any loss of use of the vehicle, as well as physical objects which are affected inside the vehicle.

What is Direct Compensation for Property Damage (DCPD):

DPCD is the changed model of Insurance Act launched by government of Alberta that help drivers in getting more consistent medical treatment and make process of claims specifically for collisions faster. DPCD comes with your mandatory auto insurance policy in Alberta.

Features offered under DCPD are:

  • The drivers can claim cost of damage in case of vehicle damage from their own insurance company if collision is not because of their fault. 
  • As under DPCD there is no third party, the cost involved for claiming the damage cost through third party insurance is reduced.  
Common concern was, will these change in Insurance Act impact your policy’s existing coverage or compensation offered by the policy.

How Payout Will Be Decided?

  • The compensation will be made by your policy. 
  • The compensation made will be irrespective of whose fault is it. 
  • The policy will compensate depending upon the extent of fault from your side that resulted in collision. If it is found that you are at 25% fault, then 75% of the cost of damage will be covered under direct compensation 
  • Remaining 25% cost i.e., at fault percentage, you have to bear out of your pocket. 
  • If the collision is not your fault, then you will get 100% compensation under DCPD. 
  • If you have bought additional coverage for collision, then the at-fault extent will be covered by additional collision coverage. 
  • If you are at 100% fault and do not have any additional coverage for collision in that case you will not get any claim for the damage or destruction of your vehicle. 
  • The claim made by you under DCPD will not have any impact on the premium.  
  • However, at-fault collisions be it partial or completely will impact your premium rates. 

Reasons and Benefits of Launching New Model:

  1. To make insurance policy fair for all drivers and insured persons. 
  2. To make process simpler, systematic and faster for you. 
  3. You don’t have to wait for other party’s insurance company to clear your claim for damage occurred 
  4. There are no deductibles in coverage offered under DCPD 
  5. Coverage for medical diagnostics and treatment is increased 
  6. Increased list of health professionals’ types who can handle collision related emergencies.  
  7. Benefits added are funeral benefits, replacement of income and grief counseling facility  
  8. Have better clarity when it comes to medical equipment coverage, modifications related with vehicle or house. 
The cost of insurance will depend upon the type of vehicle you are driving. If vehicle cost is at a higher-end, then premium will also be high as the repair cost will also be high. Another limitation of DCPD is that it does not offer any legal protection for driver and legal actions can be taken against them in case of any injuries because of collision.

As per law all the Insurance brokers in Alberta offers DCPD with deductibles. Before deciding it is important that you explore different deductible options and go for an insurance policy that suits your needs and requirements. We at iSmart, offer insurance plans especially designed to suit your requirements as well as lifestyle. We try to get you policies at best possible rates with the help of our strong network of Canada’s leading insurance companies. Our goal is to build trust with our clients that can lead us to long-lasting relationships.