Important changes are coming to auto insurance benefits in Ontario. These changes are of critical importance to anyone who owns, drives or is a passenger in a motor vehicle in Ontario.
As of July 1, 2026, many benefits that used to be automatically included in a policy of automobile insurance, will now only apply if the policy holder buys them. In addition, there will be a significant narrowing of the class of persons who will be eligible for coverage under those optional accident benefits.
BENEFITS
The following benefits will no longer apply automatically unless the policyholder elects to purchase them:
Optional Accident Benefits (No Longer in Effect by Default)
- Income Replacement Benefits (IRB)
Replaces lost income if a covered person cannot work due to accident‑related injuries. - Non‑Earner Benefits
Provides financial support to students or unemployed individuals unable to carry on a normal life due to an accident. - Caregiver Benefits
Covers the cost of replacement caregiving when an injured person can no longer care for dependants such as children or elderly family members. - Lost Educational Expenses
Reimburses tuition or educational costs if an accident prevents attendance or completion of an educational program. - Expenses of Visitors
Covers reasonable travel and accommodation costs for family members visiting an injured person. - Housekeeping and Home Maintenance Benefits
Pays for assistance with household tasks an injured person can no longer perform. - Damage to Personal Items
Covers repair or replacement of personal property damaged in the accident (e.g., clothing, prescription eyewear, hearing aids). - Death Benefits
Provides lump‑sum payments to certain family members if a covered person dies as a result of an auto accident. - Funeral Expenses
Helps cover funeral costs following an accident‑related death.
The following benefits remain optional, as they were prior to the reform:
- Supplementary medical, rehabilitation, and attendant care benefits
- Dependant care benefits
- Indexation of benefits
ELIGIBILITY
One of the most significant aspects of the reform is who qualifies for optional accident benefits once they are purchased.
Effective July 1, 2026, Optional Benefits Will Apply ONLY to:
- The named insured
- The spouse of the named insured
- Dependants of the named insured and/or their spouse
- Persons specifically listed as drivers on the policy
Who Will NO LONGER Be Covered Unless They Fall Into One of the Above Categories
Under the new framework, optional accident benefits will no longer extend to:
- Non‑listed drivers
- Passengers who are not dependants or spouses
- Extended family members not meeting the definition of “dependant”
- Friends, co‑workers, or other third parties injured while occupying the insured vehicle
- Individuals who previously may have qualified simply by being an “insured person” under the broader SABS definition
This represents a substantial narrowing of coverage compared to the current regime.
IMPACT ON EXISTING POLICIES
If You Have an Existing Policy
- Your policy will automatically renew with your existing coverages and limits, including optional benefits, unless you provide written consent to remove or modify them.
- However, eligibility for optional accident benefits will change on July 1, 2026, regardless of your renewal date.
- This means that even if coverage remains on the policy, who can claim those benefits may be reduced.
Policyholders should carefully assess whether individuals who previously relied on their policy for protection (e.g., non‑listed family members or passengers) will remain covered.
Impact on New Policies Issued on or After July 1, 2026
For customers purchasing a new policy or renewing on or after July 1, 2026:
- Only medical, rehabilitation, and attendant care benefits will be included automatically.
- All other accident benefits must be affirmatively selected and purchased.
- Coverage will apply only to the restricted group of eligible persons outlined above.
Practical Considerations
Before removing or declining optional accident benefits, individuals should:
- Review their existing auto insurance coverage
- Assess workplace or private disability, life, and health insurance
- Consider personal circumstances, including:
- Employment status
- Dependants
- Caregiving responsibilities
- Speak with their insurer, broker, or agent to understand coverage gaps
It is critical to remember that only the coverage in place at the time of an accident applies.
TAKE AWAY:
This year it is important to pay close attention to your auto insurance renewal.
Effective July 1, 2026, Ontario’s auto insurance system will:
- Preserve mandatory access to essential medical and recovery care
- Eliminate mandatory financial and family‑support benefits unless chosen
- Significantly limit who is eligible for optional accident benefits
- Shift responsibility to consumers to tailor coverage to their circumstances
These reforms provide flexibility and cost control but also introduce meaningful risk for those who opt out without fully understanding the consequences.