In December of last year, the Alberta Government passed Bill 41, the Insurance (Enhancing Driver Affordability and Care) Amendment Act, 2020. This Bill has impacted the auto insurance industry and Albertans’ rights to compensation after a motor vehicle accident.
For over a year, Bill 41 has limited the number of witnesses a plaintiff can call in a personal injury trial, and practically nullified the insurers’ obligation to pay pre-judgment interest payments on personal injury damages awards. This post will focus on a Bill 41 change which becomes effective January 1, 2022. Beginning January 1, Albertans will claim property damage (i.e., damage to their vehicle) for which they are not responsible through their own insurance companies rather than the at-fault driver’s insurance company. This “no-fault” scheme, known as direct compensation for property damage (“DCPD”), is said to decrease insurance premiums and expedite insurance claims.
What is the rationale behind DCPD in Bill 41?
The rationale behind the DCPD change was explained by the Insurance Bureau of Canada (“IBC”), as follows:
“Today, if you have a less-expensive vehicle, there’s a chance that you can hit a more-expensive vehicle on our roadways, and your insurer has to factor that into account in assessing your premiums, if you have a less expensive vehicle, you’re paying more, because of the likelihood you could hit someone driving a luxury car, for example.”IBC
IBC describes the DCPD as “a more equitable way of pricing insurance” because insurance companies will know what type of vehicle they might be paying to repair and can align drivers’ premiums with the cost of repairing those vehicles.
As you may have guessed, the DCPD will likely result in higher premiums for some Albertans, while some Albertans driving less expensive vehicles may see a slight premium decrease.
When does Bill 41’s new DCPD rule apply to me?
It is important to note that DCPD is only triggered if you are not at fault in an accident. If you are at fault or are partially at fault, damage to your vehicle is covered by optional “collision coverage” under your insurance contract. Please also note that claims under DCPD do not result in a premium increase or trigger a deductible payment.
Critically, DCPD does not impact compensation payable to Albertans who have been injured in a motor vehicle accident. As it stands, personal injury claims are still covered by the at-fault party’s insurance under “third party liability”.
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Since 1993, James H. Brown and Associates has proudly stood up for Albertans’ rights in accident injury law. Our team understands firsthand what it’s like to be seriously injured, and has over 200 years of combined experience securing fair compensation for our clients through settlements and court proceedings.
No two accidents are the same; that’s why we offer a complete range of services and support for our clients, including:
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