Auto Insurance in Ontario Will Change Significantly Starting July 1, 2026. But Pause and Think Before You Change Anything!

Starting July 1, 2026, Ontario drivers renewing their auto insurance policies will face new choices that have not been required before.

Currently, drivers in Ontario are required to have 12 mandatory auto insurance coverages. Under the proposed changes, nine of these benefits will become optional.

Experts caution Ontarians to make thoughtful decisions about which coverage to keep and which to forgo, as opting out could expose them to unnecessary risks in exchange for minimal savings.

Amanda Dean, vice-president of the Ontario and Atlantic Division of the Insurance Bureau of Canada, explains that these changes stem from a series of reviews of the auto insurance industry conducted by the Ontario government through the Ministry of Finance.

Which Benefits Will Become Optional? 

–            Income replacement benefits

–            Non-earner benefits

–            Caregiver benefits

–            Housekeeping benefits

–            Visitor expense benefits

–            Lost educational expenses

–            Damage to personal items

–            Death and funeral expenses

Which Benefits Will Remain Mandatory?

–            Medical benefits

–            Rehabilitation benefits

–            Attendant care benefits

How Much Could You Save, and Is It Worth It?

One significant change involves income replacement benefits. Currently, drivers injured in an accident can receive up to $400 per week if they are unable to work. After July 1, this coverage will only be available if drivers choose to purchase it. Industry expert David Mayer estimates that opting out of certain optional benefits could save drivers around $10 per month (approximately 5% of the average premium).

“The potential savings from opting out are likely to be small, while the financial exposure can be substantial if you do opt out,” Mayer warns.

Savings may vary based on a driver’s current coverage and their location within the province.

Dean emphasizes that costs will depend on the insurance provider, indicating potential savings but noting they will need to be assessed on a case-by-case basis once the changes take effect.

Optional Benefits Will Apply Only to Named Drivers.

Another critical change to auto insurance policies is how optional benefits will apply. Previously, Ontario auto policies automatically included full benefits, such as income replacement, for all individuals involved in an accident, including passengers, pedestrians, and cyclists.

After July 1, only medical, rehabilitation, and attendant care benefits will remain mandatory for everyone under the driver’s no-fault coverage. If a cyclist is injured in an accident, benefits like income replacement will apply only if that specific coverage is purchased.

 Will Your Insurance Benefits Change Automatically?

Changes to auto insurance benefits will be applicable only at the time of policy renewal. If your policy renews before July 1, 2026, there will be no impact until your next renewal.

When your policy comes up for renewal after July 1, you will need to decide which benefits suit you. Dean points out that if someone is hospitalized, traveling, or facing circumstances beyond their control when their renewal occurs, and they take no action, they will retain their current policy after July 1.

Ask Questions.

Dean advises, “If you don’t understand something or if any information is unclear, be sure to ask questions.”

“Knowledge is truly power, so it’s essential to recognize the risks associated with declining any of these coverages. Make sure you fully understand them before making decisions.”

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