Starting July 1, Ontario drivers will need to opt in for coverage on income replacement, damages to personal items, funeral costs and other standard accident benefits.Fred Lum/The Globe and Mail
Ontario drivers are facing major changes to their automobile insurance policies as some standard accident benefits become optional items to be purchased separately, offering consumers more choice, but raising concerns that more people will suffer financially after serious accidents.
The changes were introduced by the Ford government in 2024 and are set to begin on July 1. Medical, rehabilitation and attendant care benefits will remain mandatory for all insurance policies in the province, but all other accident benefits will become optional features as part of an “à la carte” model.
The change means that drivers will need to opt in to have coverage for income replacement, non-earner benefits, caregiver benefits for people who take care of dependants, educational expenses, visitor expenses, housekeeping and home maintenance costs, damages to personal items, death benefits and funeral costs.
“This change is more than a consumer choice reform. It is a responsibility transfer,” said Harvey Naglie, a consumer advocate and former senior policy adviser with the Ontario Ministry of Finance. “Ontario is shifting from a mostly standardized package of financial protection to a build-your-own system.”
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Mr. Naglie said the switch is high risk, particularly for a product that is complex and typically purchased by consumers under price pressure with limited understanding of what they are giving up.
Auto insurance premiums have climbed steadily as the industry faces an auto theft crisis and repair cost inflation. In Ontario, car insurance premiums rose 4.1 per cent in 2025, according to data from MyChoice, a Toronto-based insurance market data company.
When the Ford government introduced its auto reforms in 2024, it said they would help modernize the industry and could help drivers lower their premiums by allowing them to choose coverage options based on their needs.
However, the removal of some accident benefits has sparked concern among patient advocates in Ontario who say the changes will expose drivers – particularly retirees, students and self-employed workers – to major financial risk, including costly out-of-pocket expenses for lost income, dependant care and funeral bills.
Currently, all auto insurance policies in the province have statutory accident benefits – a type of no-fault insurance coverage provided under Ontario’s Insurance Act that helps victims injured in car accidents with medical expenses, income replacement and other costs, regardless of who is at fault.
Regulators say these benefits are designed to assist with recovery and rehabilitation after an accident, and provide income support, housekeeping or funeral expenses.
For example, income replacement can provide up to $400 a week if someone is unable to work after an accident.
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As of July 1, anyone shopping around for a new policy, including new drivers, will need to speak directly with an insurance agent to determine whether they want to select – or opt into – any optional accident benefits.
Existing policies will automatically renew with existing coverage and limits, unless the policyholder agrees to remove any of the nine optional benefits in writing.
At the same time, the new rules will require auto insurers to become the first payer for health services to treat crash injuries. Previously, patients had to exhaust their workplace group benefit plans first, potentially leaving them with little left over to treat other conditions.
Lillian Kim, a spokesperson for the Financial Services Regulatory Authority of Ontario, said the regulator encourages all consumers to review their coverage and speak directly with their insurer to understand which benefits are included in their quote, and to confirm whether similar coverage is available through workplace or personal benefit plans.
Despite the government suggesting changes could lead to savings in premiums, the Insurance Bureau of Canada told The Globe and Mail it does not have an estimate of those potential savings as “lower pricing was not the motivation behind the changes for insurers.”
Rather, Amanda Dean, vice-president of Ontario and Atlantic regions at the IBC, said the changes in Ontario are “transformational” for the industry as it is the first province to offer consumers a level of choice in their auto insurance.
“Currently, in every single province across the country, auto insurance is a standard product that insurers sell based on the claims and the experience they have in that given market,” Ms. Dean added. “Now, Ontario is really changing how people will shop for insurance given that there will be choice in the process.”
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Peter Janzen, senior vice-president for the Ontario Division of Canada’s largest property and casualty insurer, Intact Financial Corp., said premium calculations include a number of individual factors and savings can vary.
“The premium that a person sees is very specific to them, so you can’t necessarily compare one person to the next all the time,” Mr. Janzen said. “Your costs will align with the choices that you make. And, so, if you choose to opt out of more things, you will see that reflected in premium.”
The first wave of clients will likely begin asking questions around May 1, as clients receive notice from insurers about 60 days prior to renewal.
With nine optional benefits, Intact has already conducted several in-house supplemental training and education sessions for insurance brokers, in addition to the regulatory modules they are required to complete.
Clear, concise explanations of what is being waived will be key for consumer protection, said Anthony Grande, a physiotherapist with Focus Physiotherapy. Even under the current regime, Mr. Grande said insurance coverage is never guaranteed and can come as a surprise to someone expecting financial assistance.
“The change in coverage not only leaves accident victims exposed from not having enough funds for income replacement or to take care of dependant family members, it also means uninsured injuries will now fall on the public system to cover.”
Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.