One of the most common questions we hear during car insurance claimsopens a pop-up with definition of claims goes something like this: “If my vehicle was damaged in a collision that wasn’t my fault, do I have to pay my deductibleopens a pop-up with definition of deductible?”
While each situation is unique and there’s no one-size-fits-all answer, let’s look at a few of the factors that help determine whether or not you’ll have to pay your deductible when your insurance company determines you’re not at fault for a collision.
The general rule of thumb in provinces with Direct Compensation Property Damage coverage
If you live in Ontario, Quebec, Nova Scotia, New Brunswick, or PEI, your insurance company would typically pay for damages to your vehicle under the Direct Compensation Property Damageopens a pop-up with definition of Direct Compensation Property Damage (DCPD) section of your policy when you’re not at fault for a collision. If your insurance policy has a $0 deductible for DCPD claims, you won’t need to pay a deductible.
Let’s look at an example
You live in Ontario and another driver rear-ends your vehicle on your way to work. Your insurer determines you’re not at fault, so they cover the damage to your vehicle under the DCPD section of your policy. Your DCPD deductible is $0, so there’s no deductible for you to pay.
The exception
Your insurance company can only pay for the damages under the DCPD section of your policy if the other vehicle involved in the accident is insured by a company that either a) sells car insurance in the province where the accident happened, or b) has agreed to follow the DCPD rules in the province where the accident happened.
Let’s look at an example
You live in Nova Scotia and a driver visiting from Florida hits you on your way home from work. If the Floridian driver’s insurance company hasn’t agreed to follow the DCPD rules when a collision occurs in Nova Scotia, damage to your vehicle would be covered under the collision section of your policy. This means you’d have to pay your collision deductible. But not to worry — your insurer may be able to get your deductible back from the other driver’s insurance company, which we’ll touch on again further in this article.
What if you get into a collision in the US or in a province where DCPD doesn’t apply?
While the answer is pretty clear if you’re involved in a collision in your home province (and your province follows DCPD rules), it gets a little more complicated when you live in or get into a collision in a location where DCPD doesn’t apply.
Damage to your vehicle as a result of a not-at-fault collision will be covered by the collisionopens a pop-up with definition of collision section of your car insurance policy if DCPD rules don’t apply in the province where you live or where the accident occurs, or in situations like the Nova Scotia example mentioned above. In these situations, you’ll have to pay the deductible that is listed under the collision section of your policy.
After your insurer pays your claim, they will usually seek repayment from the at-fault driver’s insurance company — meaning if you do have to pay your collision deductible, your insurer may be able to get that money back and return it to you. If the at-fault driver’s insurance company agrees to pay for the damages up front, then your insurance company will usually agree to waive your deductible. Even when your not-at-fault collision has to be covered under the collision section of your policy, your insurance company should still consider this a not-at-fault loss — so it shouldn’t affect your premiumopens a pop-up with definition of premium.
Note: If you don’t have collision coverage and you live in or get into an accident in a province where DCPD doesn’t apply, damage to your vehicle won’t be covered at all — even if you’re not at fault. If you’re not at fault and you want to seek payment for the damage yourself, you’ll have to deal with the at-fault driver or their insurance company.
Do you have to pay your deductible if your vehicle is damaged in a hit and run collision?
If you’re the victim of a hit and run collision, damage to your vehicle will be covered under the collision section of your policy (and not DCPD) — because if your insurer can’t identify the other driver, they won’t be able to identify what kind of coverage they had, either. This means you’ll have to pay your collision deductible.
Every car insurance claim is unique, and there are a lot of variables that go into determining the outcome of a claim. If you’re wondering about your own coverage or deductibles, contact your licensed insurance broker. If you’re involved in a claim and have questions about how your coverage or deductible will apply, speak to the representative working on your claim.
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