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If I’m not at fault in a car accident, do I have to pay my deductible?

If I’m not at fault in a car accident, do I have to pay my deductible?

If you’re in a car accident and your insurance provider determines that you were not at fault, one of the first questions you probably have is “If it wasn’t my fault, do I have to pay a deductible?” Although each situation is unique and there is no quick and easy answer, here are a few factors that can determine whether you will have to pay. 

Ontario’s no-fault insurance system

Ontario has a no-fault insurance system. This does not mean that you are never at fault for a car accident, but that your own insurance company pays your claims whether you’re at fault. This means you do not have to wait for the insurance company to determine fault or deal with the insurance company of the at-fault driver, which results in your claim being processed quicker. 

When you don’t have to pay a deductible

When you’re not at fault for a car accident, claims typically fall under the Direct Compensation Property Damage (DCPD) coverage on your insurance policy. Often DCPD coverage has a $0 deductible. This means that if you’re not at fault and DCPD coverage applies, the damage will be completely covered by your insurer and you won’t have to pay a deductible. 

When DCPD does not apply

There are limits to when DCPD applies. For DCPD to apply, the company insuring the other vehicle involved in the accident must either sell car insurance in Ontario or agree to follow DCPD rules in Ontario. Insurance systems differ across Canada and not all provinces follow DCPD rules.1

This means that even if you’re driving in Ontario, if the other driver is from a province or country that has not agreed to follow DCPD rules, the DCPD coverage will not apply. You would then be covered under the collision section of your policy, which may have a deductible that you would need to pay. 

What if I’m in an accident outside of Ontario? 

Ontario, Quebec, Nova Scotia, New Brunswick, and Nova Scotia, and PEI all require DCPD coverage.1 However, if you’re driving in the United States or any other Canadian province, DCPD coverage does not apply.  
If you’re in a province or country that does not follow DCPD rules, you would be covered by your collision policy and you will have to pay your collision policy deductible. 

Is there any way I can get my deductible back? 

Yes! Even if you must pay the deductible under the collision section of your car insurance policy in an accident where your insurer finds the other driver at fault, your insurer will typically try to get payment from the at-fault driver’s insurance company for the claim. This means that you could get your deductible waived if the at-fault driver’s insurance company agrees to pay for the damages up front. 

However, if you do not have collision coverage and you have an accident where your DCPD coverage does not apply, you won’t receive any payment for damage to your vehicle. You would have to seek payment from the at-fault driver’s insurance company yourself. 

What about a hit and run? 

If you can’t identify the other driver involved in the accident, your insurer can’t identify the coverage they had and can’t cover your damage under DCPD. The damage would be covered under your collision policy and you would have to pay your collision deductible. Your rates wouldn’t be impacted as a result of this hit and run accident if you complied with certain conditions.

Find out more

Each situation is unique and is impacted by the coverage you have with your current car insurance provider. If you would like to discuss your own coverage or deductibles, contact your OTIP Insurance Broker at 1-888-892-4935 to learn more about your DCPD and collision policies. 

1.    Insurance Bureau of Canada, page 29