Starting July 1st, 2026, Ontario drivers will see significant changes to their auto insurance policies. Certain accident benefits that have traditionally been included as mandatory coverage will become optional for policyholders.
While the changes are intended to provide more flexibility and potentially lower premiums, they could also leave drivers and accident victims with less financial protection following a serious collision.
Before making any decisions about your coverage, it is important to understand what is changing and how it could affect you and your family.
What Benefits Are Becoming Optional?
Under the new rules, several accident benefits that were previously included in standard auto insurance policies may no longer be automatically provided. These include:
Income Replacement Benefits
If an injury prevents you from working, income replacement benefits help replace a portion of your lost income while you recover.
Death and Funeral Benefits
These benefits help provide financial support to surviving family members and assist with funeral expenses following a fatal accident.
Medical, Rehabilitation and Attendant Care Benefits
These cover expenses related to treatment, rehabilitation, and personal care services needed after an accident.
Caregiver and Non-Earner Benefits
These benefits can provide financial assistance if an injured person is unable to perform caregiving responsibilities or suffers a loss of normal life activities despite not being employed.
Who Should Consider Keeping These Benefits?
These optional coverages are designed to protect people in different life situations. Before opting out, consider whether any of the following apply to you:
- Do you rely on your income and don’t have disability coverage through work?
You may want to keep Income Replacement Benefits, which help replace a portion of your income if you’re unable to work following an accident. - Are you a student, retired, or currently not working?
Consider keeping Non-Earner Benefits, which provide financial assistance if your injuries prevent you from carrying on your normal daily activities. - Are you the primary caregiver for children, an aging parent, or another dependent?
Caregiver Benefits can help cover the cost of replacing the care you normally provide while you recover. - Are you enrolled in school full- or part-time?
Lost Educational Expense Benefits may help reimburse certain education-related costs if an accident interrupts your studies. - Would family members need to travel to be with you after a serious accident?
Visitor Expense Benefits can help cover reasonable travel and accommodation expenses for immediate family. - Who would maintain your home if you couldn’t?
Housekeeping and Home Maintenance Benefits can help pay for services such as cleaning, yard work, and snow removal while you recover. - Do you wear prescription glasses, hearing aids, prosthetics, or use mobility devices?
Damage to Personal Items Benefits can help pay to repair or replace essential items damaged in an accident. - Do you have dependants who rely on your income or don’t have life insurance in place?
Enhanced Death and Funeral Benefits can provide additional financial support to your loved ones following a fatal accident.
The savings from removing these benefits may seem appealing, but it’s important to compare those savings against the financial protection you could lose after a serious accident. Your Merit Insurance broker can help you determine which optional benefits are worth keeping based on your lifestyle, family, and financial situation.
What This Means for Pedestrians and Cyclists
One of the most significant changes affects pedestrians and cyclists who are injured by a vehicle.
Currently, if a pedestrian or cyclist does not have their own auto insurance policy, they may be able to access accident benefits through the insurance policy of the driver involved in the collision.
Beginning July 1, that access will become much more limited.
Pedestrians and cyclists without their own auto insurance coverage will generally only be eligible for standard medical, rehabilitation, and attendant care benefits. They will no longer automatically have access to optional benefits such as income replacement, caregiver benefits, or death and funeral benefits.
For many accident victims, this could create a significant financial gap during recovery.
Could These Changes Lead to More Lawsuits?
Many legal professionals believe these changes may result in an increase in lawsuits against at-fault drivers.
When accident victims are unable to access benefits through insurance coverage, they may have little choice but to pursue compensation through the courts. However, legal action can take years to resolve, leaving injured individuals without immediate financial support during a difficult time.
Ontario drivers are required to carry a minimum of $200,000 in third-party liability coverage, but serious injuries can result in damages that exceed that amount. This is one reason many insurance companies continue to recommend higher liability limits.
Should You Opt Out of These Benefits?
While removing optional benefits may reduce your premium, it is important to carefully consider the potential consequences.
The cost savings may seem attractive today, but the financial impact of a serious accident can be substantial. Income replacement, rehabilitation expenses, caregiver support, and other accident benefits can play a critical role in helping individuals and families recover after a life-changing event.
Every driver’s situation is different, which is why reviewing your coverage with a licensed insurance broker is more important than ever.
Talk to Your Merit Insurance Broker
The upcoming changes give Ontario drivers more choices, but they also place greater responsibility on policyholders to understand the protection they are purchasing.
Before renewing your policy or making any coverage changes, take the time to review your options and discuss them with your Merit Insurance broker. We can help you understand what coverage you currently have, what is changing, and whether maintaining certain benefits makes sense for your personal situation.
The right coverage decision is not always about finding the lowest premium. It is about ensuring you have the protection you need when it matters most.
