Updated: July, 2020
The following FAQs are intended as a general guide to auto insurance rate regulation in Prince Edward Island.
Does IRAC review rates for all types of vehicles?
Yes. The Commission reviews rates for all classes of vehicles. Private passenger makes up the biggest class of vehicles insured in PEI. Other classes reviewed include, commercial vehicles, interurban trucks, ATV’s, taxis, snow machines and motorcycles.
Is auto insurance mandatory in PEI?
Yes, owners of motor vehicles in PEI must obtain insurance coverage. Mandatory coverages include, third party liability, accident benefits, and accidents caused by uninsured and unidentified motorists.
Drivers also have the option to purchase additional insurance that would cover loss and damage to your car.
For more information on PEI’s mandatory auto insurance coverages, check out the Insurance Bureau of Canada’s PEI Mandatory Coverage summary.
What is Direct Compensation Property Damage (DCPD) and how does it affect me?
DCPD was introduced in the province on October 1, 2015. Under the DCPD model, a driver deals with his or her own insurer directly regardless of who is at fault for the accident. DCPD will cover the portion for which you are not at-fault. Collision coverage, if you choose to purchase it, will cover the portion for which you are at-fault.
DCPD is not “no-fault” insurance. Just like the former system, fault must be determined as at-fault accidents may affect your rates.
In the event of an accident, consumers are reminded to still be sure to obtain the other party’s proof of insurance information (insurer and policy number with a valid date). You will need that information for DCPD to apply. For more information, see the province’s DCPD summary.
Are there limits on accident awards for minor personal injury (pain and suffering) claims in PEI?
Yes. On April 1, 2004 the province enacted legislation which limited automobile accident court awards for non-pecuniary (pain and suffering) damages to $2,500 when an injury was deemed a “minor personal injury.”
The cap amount was subsequently reset to $7,500 and the definition of “minor personal injury” was revised for accidents occurring on or after October 1, 2014.
Effective January 1, 2016, the cap amount is indexed by the province’s annual average percentage change for all-items Consumer Price Index of the preceding year, each January 1st. For details on the indexed amounts, go to the province’s annual indexation file.
Why do rates differ from company to company?
There are broad differences in the rates charged by different insurers for similar insurance coverage. How much you pay for auto insurance will be based on many factors including, your gender, driving record, accident claims, where you live and how much you drive. A company’s losses, expenses, and the number and type of customers they service also affect rates.
It is recommended to seek quotes from different brokers or agents to compare auto insurance rates as they can vary from company to company.
Who do I contact if I have a complaint about my auto insurance?
If you have a concern about the actions of an insurance company, agent, broker, or adjuster, first speak to the insurance company. The company should have an Ombudsman to help you.
If you aren’t satisfied with the company’s response on a rate-related matter, you can reach out to the Commission.
If the matter is not rate-related, then you can contact the Superintendent’s Office for assistance, or they can direct you to a consumer insurance advocate or ombudsman agency.
What is the Commission’s role regarding auto insurance rate regulation in PEI?
The Commission’s role is limited to approving and investigating auto insurance rates or premiums for all insurance companies doing business on PEI. Each insurance company is required to make an application to the Commission annually for approval of its rates and premiums.
All other questions or concerns about auto insurance companies should be directed to the province’s Office of the Superintendent of Insurance.