Albertans will be seeing some changes in vehicle insurance in 2022.

On Jan.1, 2022, the province moved to a Direct Compensation for Property Damage (DCPD) insurance model. 

Under DCPD, your own insurance company will pay for repairs to your vehicle when you are not at fault for a collision instead of going through the other party’s insurance. Jaime Tempeny, Branch Manger with Westland Insurance Group explained the benefits that motorists in Alberta would see from this new plan and the purpose behind it.

“It will expedite claims, prevent delays and complications that can arise when dealing with another driver's insurer, and reduce the cost associated with subrogation. This will help stabilize premiums for the long term.”

Changes are also coming to the way premiums are calculated to align with costs associated with vehicle repairs. Owners with less expensive vehicles that cost less to repair will pay less for insurance. While owners of expensive vehicles that cost more to repair may pay a higher premium. 

According to the Insurance Bureau of Canada, 73 per cent of drivers will either see no increase to their premiums or will see an increase or decrease of less than five per cent. About 18 per cent of drivers will see a reduction of more than five per cent, while nine per cent will see an increase of greater than five per cent.

The changes will also allow people to ask for a deductible on their third-party liability. Tempeny said this would give people another option to make their premiums lower. Still, they would have to pay the deductible even if they weren’t found to be at fault in the accident, whereas there currently isn’t any deductible for third-party liability.  

Tempeny did say that DCPD does not impact a consumer’s right to sue for other damages, including injuries, under the existing system.

The DCPD system is already used in almost every province in Canada. 

With files from Allison Stephen