Ontario’s New Auto Insurance Model: Is Cheaper Coverage Worth the Risk?
Article by Kiel Baker and Arabella Soave
Starting July 1st, 2026, Ontario drivers will face new decisions when selecting or renewing their auto insurance policies. The option to ‘opt out’ of certain accident benefits may appeal to drivers seeking lower premiums. However, consumers should be aware that the projected savings may be minimal, while the financial risks of being underinsured after an accident could be detrimentally significant.
Changes to Accident Benefits
Under Ontario’s new model, only three benefits will remain mandatory:
- Medical benefits
- Rehabilitation benefits
- Attendant care benefits
The following benefits will now become optional:
- Income replacement benefits
- Non-earner benefits
- Caregiver benefits
- Housekeeping and home maintenance expenses
- Lost educational expenses
- Visitor expenses
- Damage to personal items
- Death & funeral benefits
The individuals covered by optional benefits are also becoming more limited. Only the named insured, their spouse, dependants and listed drivers on the policy will be eligible to receive optional benefits (1). This means that others impacted by the motor vehicle collision such as pedestrians, cyclists and other passengers who were previously covered may no longer qualify.
If you are injured and not covered under the policy, you may now need to rely on a lawsuit to recover losses beyond what is covered by mandatory benefits.
Lower Premiums, Higher Risks?
Opting out of select accident benefits may reduce your monthly premiums, but likely not by much. According to Rates.ca, as reported by CTV News, drivers opting out can expect savings of just a few dollars per month.
For many injured individuals who are injured in motor vehicle collisions, the greatest financial burdens are not medical and rehabilitation related expenses. Instead, burdens such as being unable to work for extended periods of time, losing the ability to care for children, and an inability to perform everyday household responsibilities, are lifestyle disruptions with significant financial costs and impact individuals the most. Injured drivers who elect to opt out of optional benefits, and do not have alternative coverage, may now be out of pocket for these expenses or forgo these supports altogether.
What Drivers Need to Know
For existing policyholders, your coverage will generally renew with your current benefits, unless changes are requested in writing. Before agreeing to or requesting reductions in coverage, it is important to review your policy carefully and consider whether you have comparable coverage in place through personal or workplace benefits.
Individuals without alternative coverage face a greater risk of financial hardship in the event of a serious accident if they opt out of any optional benefits. Self-employed individuals, students, stay-at-home parents and retirees traditionally are the ones most at risk as they typically rely on accident benefits as the primary, and in some cases the only source of financial support following an injury.
If you are purchasing a new policy, keep in mind that not all benefits may continue to be included by default. It is important to understand what is and what is not covered under your policy.
Conclusion
As accident benefits begin to offer less of a safety net, lawsuits will play an increasingly important role in recovery for Ontarians. However, legal claims take time to resolve, and individuals who are underinsured may be left financially vulnerable in the period between the accident and any compensation awarded or received through the claim. Since it is often too late to address gaps in your coverage after an accident occurs, relying on legal action alone may not provide the immediate financial support many injured individuals require.
Having a personal injury lawyer who understands how to navigate Ontario’s auto insurance system can make a significant difference when you or someone you love is injured in a motor vehicle accident. If you have questions about the best path forward for recovery following an accident, or would like to book a consultation, please contact us at 519-672-9330 or visit our website: Contact Us – Cohen Highley LLP Lawyers.
Suggested further reading: the Statutory Accident Benefits Schedule (SABS) is one of the regulations under Ontario’s Insurance Act. It came into effect on September 1, 2010, and it outlines the benefits to insured victims of motor vehicle accidents and the monetary amounts for each benefit.
Insurance companies use the SABS as one of their guides for determining the appropriate amount of compensation for their insured accident victim. Read more on Statutory Accident Benefits here.
Sources
- Reg. 383/24 STATUTORY ACCIDENT BENEFITS SCHEDULE – EFFECTIVE SEPTEMBER 1, 2010 | ontario.ca
- SABS Optionality Filing Specifications May 2025
- Ontario Auto Insurance Changes
- Ontario auto insurance changes coming July 1
- Here are the changes coming to Ontario auto insurance in 2026 | Rates.ca
(1)O Reg 383/24: Statutory Accident Benefits Schedule – Effective September 1, 2010, s 1(2), adding s 2(1.0.4) to O Reg 34/10.
