There are major changes coming to Ontario’s auto insurance framework on July 1, 2026, that drivers need to be aware of.
The Ontario government, in its 2024 budget, announced the reforms, which make most Statutory Accident Benefits (SABs) optional. Insurance policies are going to become more “à la carte.” SABs are a set of benefits that prior to July 1, 2026 were included in every auto insurance policy, providing financial support to Ontario drivers who have been in a car accident, and medical support if they’ve been injured, regardless of who is at fault.
The goal of the Ford government’s policy is to give drivers more choice and potentially lower premiums, by selecting only the coverage that meets their needs. According to the 2024 Ontario budget document:
“The government will move forward with auto insurance reforms that would empower Ontario drivers with more affordable options, improved access to benefits and create a more modern system. Implementation of the proposed changes will be done in a way to help ensure that drivers are able to make informed decisions when choosing insurance coverage options available to them.”
The Ontario government has indicated the changes are intended to help people who may already have disability insurance or workplace benefits and should not be paying twice for similar protections. Many of those benefits will no longer be mandatory as of July 1 and will instead become optional.
What Remains Mandatory
What is not changing are the core medical and recovery-related supports that are in place for drivers after a collision, for essential recovery support. These mandatory benefits will continue, at baseline levels with the option to purchase increased coverage:
- Medical benefits. Reasonable and necessary expenses incurred by or on behalf of the insured person because of an accident – such as medical, surgical, dental, hospital, nursing and ambulance services and medication, as well as chiropractic, psychological, occupational therapy and physiotherapy services, and transportation for treatment purposes.
- Rehabilitation benefits. These help to restore function and independence in terms of daily life, including life skills training, family counselling, social rehabilitation counselling, employment counselling, financial counselling and vocational assessments.
- Attendant care benefits. These are all reasonable and necessary expenses incurred on behalf of the insured person because of the accident for services provided by an aide or attendant or by a long-term care facility.
What’s Changing And Becoming Optional
Some benefits that are currently mandatory will become optional:
- Income replacement benefits. A percentage of gross weekly income, payable if you suffer a substantial inability to perform essential job tasks.
- Caregiver benefits. A sum to help cover caregiving expenses, whether that’s a child or aged parent.
- Non-earner benefits. If you or another person covered by the policy are a student or unemployed at the time of an accident, this benefit provides financial support during recovery.
- Housekeeping and home maintenance support. This helps cover the cost of housekeeping or home maintenance tasks that you or another person covered by the policy would have normally done before being injured in a car accident.
- Lost educational expenses. If you or another person covered can’t attend school or an education program because of an accident, this benefit helps cover those costs, such as tuition and books.
- Visitor expenses. Helps to cover reasonable and necessary expenses of visitors, such as parents, siblings or a spouse, if you or another covered person is injured.
- Damage to personal items. This item helps cover damage to personal items such as personal clothing, prescription eyewear, or hearing aids in the event of an accident.
- Death benefits. Compensates family members if you or another covered person dies because of a car accident.
- Funeral benefits. Helps cover funeral costs if you or another covered person dies as a result of a car accident.
Who Is Impacted by the Changes?
In general, the optional accident benefits apply only to the named insured, their spouse, dependants, and drivers specifically listed on the policy.
According to the Insurance Bureau of Canada, if you are a customer renewing your insurance, all accident benefits except medical, rehabilitation and attendant care will become optional.
Your current coverage will automatically continue as is unless you choose in writing to make changes or decline benefits in the insurance policy, therefore if you are happy with your coverage there is no action that must be taken.
Customers in Ontario buying insurance for the first time on or after July 1 will start with only the mandatory minimum accident benefits and can choose optional benefits they would like to purchase, based on individual needs, such as starting a new job, having children or taking on caregiving responsibilities. Optional benefits can be changed at any time after July 1 but only the coverage in place at the time of an auto accident will apply to any claim.
Get Educated
These changes are meant to ensure that auto insurance becomes the first payor for medical and rehabilitation claims, except medication expenses, so your workplace benefits are kept for other life events.
The first step for Ontario drivers is to get educated. Review your current auto insurance coverage. Reach out and have a conversation with a broker or insurer to understand what protections are included, and what has been declined or made an option, and get a quote based on your needs.
Also, review any workplace or private benefits to see if you already have coverage through your employer, private benefits plan or life and health insurance.
Not having an understanding of the coverage you have and the coverage need could result in gaps in coverage in the event of an accident.
Disclaimer: This information has been provided for your convenience only and should not be construed as providing legal or insurance advice. Coverage is subject to policy terms, conditions, and applicable law.