, Ontario will overhaul how auto accident benefits work and how Ontario auto insurance rates are set If you’re a driver in Ontario, big changes are coming to your auto insurance policy. As of July 1, 2026, the province is shifting to a new “à la carte” model for auto insurance . This is one of the most significant overhauls in years, and it’s designed to give you more choice over your coverage. However, with more choice comes more responsibility. Understanding these changes now can save you from financial stress later.
This guide breaks down everything you need to know about the 2026 reforms, what they mean for your wallet, and how to ensure you’re not left vulnerable after an accident.
The Big Shift: From Mandatory to Optional
To understand the change, you need to know about the Statutory Accident Benefits Schedule (SABS) . This is the part of your policy that provides benefits if you’re injured in a car accident, no matter who is at fault .
Currently, a broad set of these benefits is mandatory for every policy. Under the new system, which takes effect July 1, 2026, that list shrinks dramatically. Only Medical, Rehabilitation, and Attendant Care benefits will remain mandatory . Everything else becomes optional.
This means that coverage you once had automatically will now require an active choice—and an additional cost—to keep.
Which Benefits Are Changing?
Here’s a breakdown of the benefits shifting from mandatory to optional :
- Income Replacement Benefit: Currently, if you’re injured and can’t work, you receive up to $400 per week. This will become optional. If you don’t opt in, you won’t have this safety net.
- Caregiver Benefit: Provides compensation if you’re caring for a dependent and are injured.
- Housekeeping and Home Maintenance Benefit: Covers the cost of hiring help for chores you can’t do due to your injuries.
- Non-Earner Benefit: For people who were not employed at the time of the accident (like students or stay-at-home parents).
- Dependent Care Benefit: Covers expenses related to caring for dependents while you recover.
- Death and Funeral Benefits: Provides a payment to your family in the event of a fatality.
Only Medical, Rehabilitation, and Attendant Care remain mandatory, though you can still choose to purchase higher limits for these coverages .
Why the Change?
The Ontario government’s rationale is simple: choice and potential savings. The theory is that many drivers are already paying for duplicate coverage. For example, if you have a comprehensive workplace disability plan that covers lost wages, you might not need the Income Replacement Benefit on your auto policy .
By making these benefits optional, the government argues, drivers can tailor their policies and potentially lower their premiums by not paying for coverage they don’t need . The Insurance Bureau of Canada (IBC) notes this will allow drivers to purchase only the auto benefits they require .
The Hidden Risks: What You Could Lose
While the promise of lower premiums is attractive, insurance professionals and personal injury lawyers are sounding the alarm. The risk is that drivers, focused on saving money, will unknowingly leave themselves financially exposed.
Kori Duff, a Licensed Insurance Advisor, warns, “Although opting out of these benefits may result in a lower premium, it also increases the risk of being without critical protection in the event of an accident-related injury” .
Here are the key dangers:
- The Income Gap: The loss of the automatic Income Replacement Benefit is the biggest concern. If you opt out and are later injured, you could be left with no income. This is particularly risky for gig workers, self-employed individuals, and those without robust employer disability plans .
- Vulnerability for Non-Wage Earners: Stay-at-home parents, students, or retirees rely on benefits like Caregiver and Non-Earner coverage. Without them, a family’s entire dynamic can collapse after an accident, with no financial help to fill the gap .
- The “It Won’t Happen to Me” Trap: As personal injury lawyer Catherine Shearer points out, “It’s not until you need benefits that you become aware that not having them is a problem” .
What This Means for Your Wallet
So, will you save money? Possibly, but probably not as much as you think. The Insurance Brokers Association of Ontario (IBAO) conducted a study suggesting that consumer savings may amount to no more than $100 on a policy, even if drivers drop most of the optional coverages .
According to Surex’s 2026 outlook, pricing in Ontario is expected to remain relatively steady. For those who keep their existing benefits, premiums will likely reflect underlying loss trends, meaning a “moderate-to-meaningful increase for most drivers” similar to 2025 . However, drivers who choose to remove optional benefits after July 1 could see some premium relief, though experts strongly advise consulting a broker first .
Other factors will still influence your rates, including rising vehicle repair costs, your location, and your driving record .
Your Action Plan: How to Prepare
This isn’t a “wait and see” situation. You need a proactive plan. The Financial Services Regulatory Authority of Ontario (FSRA) and the Registered Insurance Brokers of Ontario (RIBO) expect insurers and brokers to start educating customers well before their renewal date .
Here are four steps you should take:
1. Review Your Current Coverage and Workplace Benefits
Before your renewal, take inventory. What coverage do you have now? More importantly, check your workplace benefits or any private disability plans. Do they cover long-term disability? Do they have exclusions for motor vehicle accidents? “Many people assume that because they have short-term disability coverage, they don’t need additional accident benefits,” notes Catherine Shearer, but some company plans specifically exempt motor vehicle accidents .
2. Have an In-Depth Conversation with Your Broker
Your insurance broker is your most valuable resource. Renewal conversations will likely take longer than usual . Don’t just accept the lowest quote. Ask your broker to explain the implications of opting out of each benefit. They can help you compare your current coverage to the new options and identify gaps .
3. Take Advantage of Educational Resources
A free, two-hour online course titled “2026 Ontario Auto Reform: Introduction to Accident Benefit Changes” is available to train industry professionals, but the information is a great benchmark for consumer understanding as well . You can also visit the FSRA website, which has a dedicated hub with consumer fact sheets and plain-language explanations of the changes .
4. Document Your Decisions
Once you’ve had the conversation with your broker and made your choices, ensure everything is documented. This protects you and ensures there’s a record of why you selected (or declined) certain coverages .
The Bottom Line
The auto insurance reforms coming to Ontario on July 1, 2026, represent a fundamental shift. While the promise of lower premiums and more control is appealing, the complexity of the choices now rests on your shoulders.
The cheapest policy is rarely the best policy. By taking the time to understand the changes and seeking professional advice, you can build a policy that not only fits your budget but, more importantly, provides a true safety net when you need it most.
