Ontario drivers may soon notice significant changes to their auto insurance coverage. Beginning July 1, 2026, the province is introducing a new system that changes the accident benefits included in automobile insurance policies. Most no-fault benefits will become optional. When your policy renews after July 1, your insurer will likely offer you the choice to remove them, but be careful! If you change insurers, these benefits will not be included unless you ask for them.

While some drivers may welcome the possibility of lower premiums, it is important to understand what could be lost in exchange for reduced coverage - particularly after a serious collision.

What Is Changing?

Historically, Ontario auto insurance included a broad package of benefits to help you recover if you, anyone in your family, or anyone in your car were injured in a crash. These benefits included:

• Income replacement benefits of 70% of your income to a maximum of $400 (or more if you purchased an optional max);
• Non-earner benefits of $185 weekly if you were not employed at the time;
• Housekeeping and home maintenance benefits up to $100 weekly;
• Reimbursement for damaged clothing or medical devices;
• Reimbursement to family members for their expenses coming to visit you when you were injured;
• Funeral benefits up to $6,000;
• Death benefits of $25,000 for your spouse and $10,000 per child if you were killed in an accident;
• Caregiving benefits if you were catastrophically injured;
• Medical and Rehabilitation coverage up to $3,500, $65,000, or $1,000,000 depending on the severity of your injuries.

Under the incoming changes, only the medical & rehabilitation coverage will automatically be part of new policies, and you will have the option of removing the other benefits from your policy when you renew.

Will You Automatically Lose Coverage?

No. Your policy will continue to have all the coverage it currently does, and you will keep all that coverage, unless you decide to remove it. We expect that insurers will encourage you to "tailor" your coverage in order to reduce your premiums, because all of those now-optional coverages will become a line item in your premium. 

If you buy a new policy after July 1, none of the optional benefits will be included unless you ask for them.

Be careful! Review your renewal documents and policy changes, and think about your situation before agreeing to modify existing coverage. For example:

• If you have a stable job, and have access to disability benefits through work, you may feel that you don't need to purchase Income Replacement Benefits through your auto policy. Before discarding Income Replacement Benefits coverage, check with your employer that their disability coverage doesn't exclude disability caused by a car accident. Many do!

• Even if you have disability coverage through work, if your spouse, or a child who is a named insured, doesn't, then you will need Income Replacement Benefits coverage and maybe Non-Earner Benefits coverage to protect them if they are injured - including if they are hurt by a car while walking or cycling. 

• If you keep Income Replacement Coverage, make sure the weekly maximum you choose is as close to 80% of your income as you can. The standard maximum of $400 weekly hasn't changed since 1996, and is often far from enough to meet expenses.

• If you have family members living outside Ontario or Canada who you will want to have by your side if you are seriously injured, you should keep the Visitor Expense coverage. Airfare is not getting any cheaper! 

• If you and all family members on your policy already have life insurance, you may not need this benefit. If you don't, consider keeping the death and funeral benefits option, and choose an amount useful to you and your family. Compare the premiums to the cost of a life insurance policy - the death & funeral premium on your auto policy should be cheaper than life insurance, because it is only payable if the death arises from a car accident. 

Talk to your insurance broker about what benefits are important for your family, in your situation, before making any changes to your policy.

Why This Matters 

Many people focus on premium costs when purchasing insurance, but accident benefits often become critically important only after a life-changing injury occurs.

A serious motor vehicle collision can affect your ability to work, care for family members, and look after yourself. Optional benefits can become extremely important during recovery. When deciding what to choose in your policy, consider your needs in the event of injury, not just the premium amount.

Not Everyone Has Access to the Same Coverage

Another important change is who will have access to optional benefits after a crash.  Currently, your family members or anyone in your car who is hurt, and any pedestrian or cyclist whom you injure with your car who doesn't have their own auto insurance, can access all the benefits under your policy.

After July 1, only your family (your spouse and dependent children) and anyone else who is a listed driver on your policy will have access to the optional benefits in your policy. People to whom you lend your car, passengers in your car, and pedestrians or cyclists whom you hit will only have access to medical & rehabilitation benefits unless they have their own auto insurance.

What Should You Do Come July 1, 2026?

Review your current auto coverage, talk to your broker, and decide whether you need to change your coverage, either by improving it or by removing some coverage. Before you actually make changes, make sure you understand your family's needs, and how any changes will affect you and other family members.

Lower premiums are attractive, and there is no point in having coverage you won't need, but reduced coverage can carry significant financial and personal consequences after a serious injury. Be aware that a lower premium often reflects insufficient coverage, unless you are careful.

Our job is to help you get the benefits to which you are entitled after you are injured in a car accident. We cannot get you needed benefits if you do not purchase them. If you are not at fault for the accident, you may eventually recover your losses from a lawsuit, but that is a lengthy process. 

If you have questions about accident benefits or your rights after a motor vehicle collision in Ontario, we can help you navigate the complexities of accident benefit claims and insurance disputes. Understanding your coverage can make a significant difference during your recovery process, particularly when benefits are denied, limited, or unclear.

This video is provided courtesy of the Ontario Trial Lawyers Association (OTLA). Additional consumer information is available at truthaboutinsurance.ca.

Certain information presented on this page references educational resources published by the Ontario Trial Lawyers Association (OTLA). Through its consumer education campaign, OTLA has developed materials to help the public understand Ontario's changing auto insurance landscape. Those resources can be accessed at truthaboutinsurance.ca. We believe it is important that individuals and families have access to clear information about these changes so they can better protect their rights and coverage options.