Ontario's Auto Insurance Reform: Opting Out of Accident Benefits Saves About $100 a Year, but Critics Warn of Gaps

Ontario drivers renewing their car insurance this autumn face a choice that did not exist a year ago: whether to keep or drop several accident benefits that used to come with every policy. The change took effect on July 1, 2026, and the savings from opting out are modest. Estimates from industry and independent analysts cluster around $100 a year, while victims' advocates warn that the choice carries risks that few drivers will think about until they need the cover. This article explains what changed, with the source for each figure, and does not recommend what any individual should choose.

What changed on July 1? According to Insurance Business Canada, several accident benefits that were mandatory under every Ontario policy became optional. Existing policyholders keep their current coverage at renewal unless they agree in writing to reduce it, and new customers must choose any optional coverage they want. The MyChoice analysis lists the newly optional items as income replacement, non-earner, caregiver, housekeeping and home maintenance, lost educational expenses, expenses of visitors, damage to personal items, and the death and funeral benefits. Some coverages, including dependant care, increased medical, rehabilitation and attendant care, and indexation, were already optional before July. The reform also changed who pays first for treatment. For accidents on or after July 1, 2026, auto insurance generally pays eligible medical and rehabilitation expenses after the public health plan but before supplementary health plans, with medication excluded. Insurance Business reports that auto insurance is now the first payer even when a claimant has group health coverage.

How much can a driver save? Two estimates are available. The Insurance Brokers Association of Ontario estimates that opting out of all the newly optional benefits saves about $100 a year at most, roughly 5% of an average premium of about $2,000. MyChoice, a comparison site, analysed more than 1,000 quotes for a standard profile, a 35-year-old married driver with a clean record, and found that declining all newly optional benefits saved about $106 a year, or $8.83 a month, about 5% of a $2,132 average premium. Income replacement accounted for about $47 of that, housekeeping about $36, caregiver about $10 and non-earner about $8, with most other items about $1 each. MyChoice cautions that its figures are based on quotes and not bound policies or completed claims, reflect only the first month of the new system, and do not represent all drivers. Individual savings will vary.

What are drivers choosing? In the MyChoice sample, 32.6% declined every optional benefit and 67.4% kept at least one. About 64% kept the death and funeral benefits, 52% kept income replacement, while only about 11% kept housekeeping and 10% kept caregiver. The weekly limits in the quotes analysed were $400 for income replacement, $185 for non-earners, $250 for the caregiver benefit for the first dependant and $100 for housekeeping. These are the limits in that sample, and policies can differ.

The critics' case is stated by the Association of Victims for Accident Insurance Reform, known as FAIR. Its board chair, Rhona DesRoches, said the illusion of more choice will only help insurance companies, alleged that insurers lobbied for the changes, and said the changes weaken long-standing consumer protections. She expects the savings to be small and temporary, with premiums rising again later. The Insurance Bureau of Canada, the industry's trade body, calls the reform a move away from a one-size-fits-all model and argues that drivers avoid paying twice for coverage they may already have through work. Brokers' associations broadly support the framework but want strong disclosure at the point of sale, and the Ministry of Finance says the changes give drivers more choice and convenience.

One of the most important facts concerns people who are not drivers. The Insurance Bureau of Canada says about 40% of accident victims do not hold their own auto policy. Passengers, pedestrians and cyclists may therefore rely on the reduced minimum unless the at-fault driver bought optional benefits. That is the context for the advocates' warning. A driver who opts out is also reducing the protection available to others in an accident that driver causes, although the sources do not quantify how often this would matter.

What about premium trends? The Financial Services Regulatory Authority of Ontario data cited by Money.ca show the average annual private passenger premium rose from $1,927 in June 2024 to $2,164 in October 2025, an increase of 13.3%. The Insurance Brokers Association of Ontario puts the rise at more than 12%, and the increases have been driven by repair costs and auto theft. In its article of September 20, Money.ca reported that the regulator had approved rate decreases for nine insurer filings, with renewals taking effect between August 15 and November 28, 2026. The largest average cut was 5.3% from The Personal Insurance Company, effective November 28, and the others ranged from 0.23% for Wawanesa to 4.62% for Heartland Farm Mutual. One insurer, S&Y Insurance Company, was approved for a 1.19% increase effective September 1. The article noted that the regulator has not tied any specific rate filing to the reform. A projection by the consulting firm Oliver Wyman, quoted by MyChoice and assuming 80% take-up, found that the reduction from declining coverage would be offset by higher costs elsewhere, leaving a projected net increase of 0.28% in the required average premium. That is a projection, not an observed result.

What should a driver do at renewal? Read the renewal documents carefully, because existing coverage continues unless you agree in writing to change it. Ask your broker or insurer to list exactly which benefits you would be dropping and what the premium difference is. Check what you already have through an employer plan, including disability and health benefits, and whether those would apply after a car accident. Consider your household: a family with one earner and young children may value income replacement and caregiver benefits differently from a single driver with employer disability cover. Compare quotes from several insurers, and keep a record of any change you approve.

The regulator has urged insurers and brokers to document clearly which coverage is added or removed at each transaction. The first full year of data will show whether premiums fall, whether many drivers regret their choices, and how claims develop. For now, the reform offers a small saving in exchange for a more complicated decision, and the fact that the saving is about $9 a month is a reason to weigh carefully what is being given up.