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Here are the changes coming to Ontario auto insurance in 2026
QUICK TAKEAWAYS
- Starting July 1, 2026, Ontario auto insurance shifts to an "à la carte" system, making many current mandatory benefits optional, except for medical, rehabilitation, and attendant care.
- Policies renewing after July 1, 2026, will retain current benefits unless you opt out in writing. New policies will only include mandatory minimums by default.
- Opting out of accident benefits saves a few dollars monthly but exposes drivers to major financial risks and costly out-of-pocket expenses.
- Self-employed workers, students, retirees, stay-at-home parents, and low-income earners face higher risks if they opt out, as they often lack alternative safety nets.
- Review your coverage, assess your needs, and consult an insurance broker to ensure adequate protection, as the cheapest policies may leave you underinsured.
Big changes are coming to auto insurance in Ontario. Starting July 1, 2026, the province is shifting from a mostly standard benefits package to a more "à la carte" system.
Currently, a number of accident benefits — such as income replacement, caregiver benefits, and non-earner benefits — are legally mandatory in every auto insurance policy. After July 1, many of these will become optional, leaving only medical, rehabilitation, and attendant care benefits as standard inclusions.
This reform, introduced in the 2024 Ontario Budget, aims to provide more flexibility. The core idea is that if you already have certain coverages, like disability benefits through your workplace, you shouldn't have to pay for similar protection twice.
But while lower premiums may seem appealing, the actual dollar savings from opting out of accident benefits are often surprisingly small — just a few dollars each month.
Opting out? Small savings, big risks: These minimal savings pale in comparison to the massive financial risks you take on, leaving you vulnerable to significant out-of-pocket expenses and without critical support when you need it most.
What are the statutory accident benefits in Ontario?
Accident benefits, also known as ‘statutory accident benefits schedule’ (SABS), are a key part of every Ontario auto insurance policy.
They provide financial support for you and your family if you are injured in a car accident — no matter who is at fault — for:
- Medical and rehabilitation costs
- Attendant care
- Income replacement
- Caregiver and non-earner benefits
- Death and funeral expenses
These listed benefits are included in Ontario insurance policies today, with insureds having the option to add or increase coverage limits.
Read more: What do accident benefits in Ontario cover?
How will Ontario accident benefits change on July 1, 2026?
Currently, a standard policy includes a bundle of mandatory benefits. Starting July 1, 2026, the new system will apply to all policies, whether renewing or new.
Renewing policies
If your policy renews on or after July 1, 2026, it will automatically renew with the same benefits and limits you currently have, unless you actively opt out in writing. This ensures you won’t lose coverage unless you choose to make changes.
New policies
For policies purchased on or after July 1, 2026, only the mandatory minimums (medical, rehabilitation, and attendant care) will be included by default. Insurance providers must offer optional coverages, and you’ll need to decide upfront which additional benefits to include.
Mid-term changes
After July 1, 2026, you can opt out of optional coverages at any time, even if your policy hasn’t come up for renewal. If you remove a coverage mid-term, you’ll typically receive a pro-rated refund for the unused portion of the premium.
“As your lifestyle changes and your needs change, your insurance policy needs to change too. If you move, for example, or start a business, you need to let your insurance company know so they can properly protect you,” says Daniel Ivans, Rates.ca insurance expert and licensed insurance broker.
What stays mandatory?
| Coverage type | Status before July 1, 2026 | Status after July 1, 2026 |
|---|---|---|
| Medical, rehabilitation, and attendant care | Mandatory | Mandatory |
| Income benefits replacement | Mandatory | Optional |
| Non-earner benefits | Mandatory | Optional |
| Caregiver benefits | Mandatory | Optional |
| Housekeeping and home maintenance | Mandatory | Optional |
| Lost educational expenses | Mandatory | Optional |
| Visitor expenses | Mandatory | Optional |
| Death and funeral benefits | Mandatory | Optional |
| Damage to clothing, glasses, hearing aids, etc. | Mandatory | Optional |
What becomes optional?
Many benefits that are currently included by default will become optional endorsements or riders (commonly referred to as "add-ons"). You will need to decide if you want to opt-in or opt-out. These include:
- Income replacement benefit:
If you are unable to work after an accident, this benefit provides a portion of your lost income. The standard benefit is 70% of your gross weekly income, up to $400 per week. - Caregiver benefit:
If you are a full-time caregiver for dependents and can no longer perform that role due to catastrophic injuries, this benefit reimburses you for the cost of hiring help. - Housekeeping and home maintenance:
This helps pay for someone to manage your household duties if your injuries prevent you from doing them yourself. This is typically only available for catastrophic injuries. - Death and funeral benefit:
Provides a lump-sum payment to your spouse and dependents, along with an amount to cover funeral expenses, if you die as a result of an auto accident. - Non-earner benefit: If you aren’t employed but are completely unable to carry on a normal life after an accident (e.g., a student or retiree), this provides $185/weekly for up to two years.
Making these benefits optional means the default, cheapest policy will offer far less coverage than today, while only reducing costs by approximately 5%. Drivers risk losing critical protections for minimal savings.
Learn more: Ontario’s budget 2024: Drivers will soon be able to opt out of certain mandatory auto insurance coverage
What are the risks of opting out of accident benefits?
While more options may seem beneficial, the real issue is that many people don’t have enough information to fully understand the consequences of their decisions.
“Choice is good, but knowledge is power,” says Ivans.
Without knowing the risks of declining certain coverages, it’s much harder to make informed choices.
As Ivans explains, declining coverage always creates “exposure to risk”. Insurance exists to protect against this risk, whether financial, emotional or physical.
Yet, he says, “every time a consumer opts out of a coverage to save a few dollars, they are essentially saying, 'I'm willing to take the risk that won't happen to me.'”
But in reality, claims happen. People need income replacement, in-home healthcare, housekeeping, and other support services. Insurance companies base their pricing on real-time claims data, which underscores the reality that these risks are not just hypothetical — they are real and frequent.
Related: Demystifying direct compensation – property damage coverage
A few dollars saved, thousands lost: The danger of being underinsured
The reforms in insurance have been framed as a way to give consumers more choice in how they allocate their money, rather than a means to deliver significant savings.
According to Ivans, the savings from opting out of certain coverages are often very small compared to the significant financial risks you take on if something goes wrong. While lower premiums might seem appealing, the potential costs of being underinsured can be devastating.
A self-employed contractor earning $1,500 weekly could lose $39,000 in six months if they are unable to work after an accident. Without income replacement benefits, they’d struggle to cover essentials like mortgage payments, food, and bills.
Even the standard $400 weekly benefit would provide crucial relief, with enhanced coverage available to further ease the burden.
In the end, the risks of being underinsured far outweigh the short-term savings. The choice may be yours, but understanding the potential consequences is key to making an informed decision.
Who is the most vulnerable to these changes?
Certain groups face higher risks if they opt out of benefits, as they may lack alternative safety nets:
- Self-employed individuals and gig workers: These individuals often lack access to workplace disability plans and rely entirely on their ability to work for income.
- Students and retirees: The non-earner benefit is designed for them. An accident could disrupt studies or deplete retirement savings without this protection.
- Stay-at-home parents: Their unpaid labour is essential. If they are injured, the caregiver and housekeeping benefits can help the family manage.
- Low-income earners: While the temptation to lower premiums is high, this group may have the least financial capacity to absorb the impact of a serious injury without proper benefits.
Many people may choose to opt out of coverages to save money, even if they aren’t living paycheck to paycheck.
However, for those who are, Ivans says the financial risks are even greater.
“The reality is that if you're living paycheck to paycheck, you're one unexpected expense away from financial trouble," he says. "When something happens that costs $5,000, $10,000, or $100,000 out of the blue, most people aren’t prepared to handle it.”
E‑bike and scooter riders to receive fewer protections
Currently, riders in collisions with motor vehicles can access the driver's no‑fault benefits like income replacement, medical, caregiver, and death benefits.
However, under the 2026 reforms, these protections apply only to the insured, their spouse, dependents, and listed drivers. E-bikes and scooters would not be classified under "automobiles". Therefore, e‑bike and scooter riders who are struck by a car would not be eligible to the above coverages and instead would receive only medical and attendant‑care coverage. These riders would likely have to resort to suing the driver for income loss and other damages.
For those relying on micromobility for work or commuting, this creates a significant gap unless they pursue litigation or buy separate coverage.
Making an informed decision: What you need to do
As these changes approach, it’s more important than ever to be proactive and informed about your auto insurance. Ivans advises that the first question you should ask should be: What are my optional coverages and how am I impacted by these changes?
Alongside, here are some helpful best practices:
- Review your current coverage: Start by understanding what’s in your current policy. Look at the ‘accident benefits’ section and the coverage limits you have.
- Assess your needs and existing benefits: Look closely at any benefits you have through your employer or a private plan.
- Do you have short-term and long-term disability coverage? What percentage of your income does it cover, and for how long?
- Does your extended health plan cover services like physiotherapy or chiropractic care? What are the annual limits?
- Remember that workplace benefits can change if you switch jobs. Auto insurance benefits stay with you regardless of your employment status.
- Don't automatically choose the cheapest option: Starting in 2026, the cheapest policies will likely exclude key benefits, leaving you vulnerable to substantial out-of-pocket expenses after an accident. Opting for the lowest-cost option could mean being dangerously underinsured.
- Talk to a professional: Your insurance broker is your most valuable resource. They can help you understand the nuances of the new system, compare your workplace benefits to the optional insurance coverages, and recommend a policy that provides the right level of protection for your unique situation.
The upcoming reforms put more power in your hands, but with that power comes the responsibility to make smart choices.
Read next: Cheap(er) car insurance: Strategies to save money
Frequently asked questions (FAQ)
Can I opt out of accident benefits in Ontario now?
No. Opt-out options will only be available starting July 1, 2026.
Will my coverage change automatically after July 1, 2026?
No, renewing policies will keep your existing benefits unless you actively opt out in writing.
Is opting out of accident benefits worth it?
For most drivers, no. The savings are minimal compared to the potential financial risks of being underinsured.
What happens if I don’t opt into optional benefits?
Your policy will only include the mandatory minimums: medical, rehabilitation, and attendant care benefits. This leaves you without income replacement, caregiver, or other critical protections.
How much can I save by opting out of optional benefits?
Savings are typically small, around 5% of your premium, which may only amount to a few dollars per month.
Can I add optional benefits later if I initially opt out?
Yes, you can add optional benefits mid-term, but you may need to pay a pro-rated premium for the additional coverage.
What should I consider before opting out?
Review your current policy, assess your workplace benefits, and consult with an insurance broker to understand the potential risks and ensure you’re adequately protected.
Are workplace benefits enough to replace accident benefits?
Not always. Workplace benefits can change if you switch jobs, and they may not cover all the services or income replacement levels provided by auto insurance.
Save on Ontario auto insurance
Auto insurance rates change often, so how do you know if you're still getting the best deal? By comparing car insurance quotes upon renewal and at other key milestones (such as when you buy a new vehicle, or more to a different neighbourhood) you can make sure your rates remain competitive. Save money by comparing Ontario car insurance quotes today.
Arshi Hossain, Associate editor
Arshi Hossain is the associate editor at Rates.ca. She has 4+ years of experience in delivering strategy-backed digital content through various mediums. Her expertise lies in breaking down complex information, meeting people where they are, and in the moments that matter.
Prior to joining Rates.ca, she worked in the editorial and digital content space at Wealthsimple, supported digital strategies, and UX writing for payment products and solutions at Bank of Montreal. She has also worked with startups to support editorial, content writing, communications, copywriting, and marketing needs.
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