DCPD & Tort
Can you clarify the difference between property damage and DCPD?
Also, I'm a bit confused on what is meant by tort law in a province? Does it have to do with pain & suffering?
Why is there inefficient delivery of medical care in a tort province?
In Ontario, what distinguishes the hybrid tort/no-fault system here?
Comments
Property damage versus DCPD:
"Normal" property damage is a liability coverage and covers damage to the other person's car if you were the at-fault driver.
Direct compensation property damage (DCPD) is when your insurer pays you to have your vehicle repaired after a collision. It's part of the no-fault system, so it doesn't matter whether you're at fault or not.
Tort law:
Damages for pain & suffering fall under tort law, but tort law means more than just that:
Inefficient delivery:
The reason for inefficient delivery of medical care in a province with a tort system is that the person who needs the medical care may not receive any compensation until they go to court and get a settlement. This could take months or years, but they usually need the money right away. That means their medical care would be delayed and their health outcomes would be worse. (A tort system is basically a system where you have to go to court to get the compensation you deserve.)
Hybrid tort/no-fault system
Ontario uses a hybrid no-fault and tort liability model for car insurance. After an accident, your insurer may compensate you for a portion of your losses (no-fault system), but you can also sue another party for additional compensation (tort system).
So in a province that is non-tort, are you able to sue the negligent driver or not?
Also, why is DCPD considered third part liability if the insurer pays you whether its at-fault or not? For example, let's say I get into an accident that is my fault. I will collect DCPD for property damage to my car. But then what about collision coverage? Isnt there an overlap in coverage in that case?
If someone is not at fault and gets injured in an accident, they will collect DCPD in Ontario. Do they collect this from their insurer directly (not the negligent drivers insurer)? If so, does their insurer get reimbursed from the negligent drivers insurance company in the back-end?
If the province has a pure no-fault system, then you cannot sue. DCPD is not actually considered 3rd party liability. Here's a web page that explains it pretty well (just scroll down by about 1 page to get to the DCPD part):
Don't get too hung up on this. If you understand the short DCPD discussion on the web page above, that will more than enough for any exam question. (Anything more detailed is not on the syllabus and would not be asked on the exam. Exam questions would generally only have broader questions about advantages and disadvantages of the different systems: tort, no-fault, or hybrid.)
P.S. There could indeed be overlap between DCPD and collision. For example, if you are found to be partially at-fault, that part of your claim would fall under collision and the rest under DCPD.
great website! thank you so much!!
sorry one more question here... does regular property damage coverage exist in a tort province? or is that replaced with dcpd
Yes for sure. In Ontario for example, PD is lumped together with Bodily Injury. You have both TPL-PD and DCPD
can you expand a bit more on this..
say I accidently crash into person X... both of us have damage to our cars...
I will claim damage under collision coverage and person X will claim under DCPD or TPL-PD ?
There's two cases:
If you are at fault then your TPL-PD coverage pays for the other person's vehicle damage. Your own would be covered under collision.
If you are not at fault, then your DCPD coverage pays for your vehicle damage, and your insurer can get recoveries from the other person's TPL-PD coverage
So my understanding is that DCPD was introduced to make transactions and access to benefits quicker since you can go through your own insurer. Since DCPD is a third party coverage, their insurer will get recoveries from the insurer of the at-fault driver correct? So isnt DCPD = TPL PD? But they are just opposite signs?
In a way, yes. But sometimes the at-fault driver will have no coverage (uninsured motorist) or not enough coverage (underinsured motorist) so I wouldn't say it's directly equal.
if we assume that the # of uninsured and underinsured drivers are small... then for DCPD claims... wont the insurer pretty much get entirely reimbursed for these claims from the at-fault driver's insurer?
I'm not entirely sure of the mechanics, but there should be differing ALAE amounts and you probably won't always be able to obtain full recovery from the at-fault insurer all the time
From the battleacts page it said:
I understand why there is more pain and suffering due to tort system as you have mentioned above, but why is there an increase of non-pecuniary awards as well?
Just the general concept of social inflation basically which is a general trend that we see in the industry