What Is Ontario Auto Reform?
July 21, 2026
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On July 1, 2026, the Ontario government introduced significant changes to automobile insurance policies. These updates affect both your coverage options and who is covered under your policy. Most notably, several Accident Benefits that were previously mandatory are now optional, giving drivers more flexibility to customize their coverage based on their individual needs.
This isn’t the first time Ontarians have seen changes to the standard auto insurance policy. In June 2016, the Ontario government lowered the required limits for many Accident Benefits related to the treatment and rehabilitation of injuries sustained in a motor vehicle accident. Citing the need to stabilize insurance rates and lower premiums, the government reduced the required catastrophic injury limits from $2 million to $1 million. For non-catastrophic injuries, the separate limits of $50,000 for medical and rehabilitation expenses, and $36,000 for attendant care were combined into a single $65,000 limit. Those changes remain in effect today, although policyholders have the option to purchase higher limits for additional protection.
The latest auto reform builds on those earlier changes by giving drivers even more choice over the coverage and limits they carry. In this blog, we’ll explain what changed on July 1, which Accident Benefits are now optional, and what questions you should consider before making any changes to your policy.
What Changed on July 1?
Beginning July 1, 2026, the Ontario Government made changes to the Accident Benefits portion of the standard auto insurance policy. The biggest change that consumers will notice is several Accident Benefit coverages that were previously mandatory became optional, giving you more choice in the coverages you carry. After July 1, only medical, rehabilitation, and attendant care benefits will be standard in Ontario auto policies. Those three coverages cannot be removed.
However, the following twelve coverages are now optional: income replacement, non-earner benefits, caregiver benefits, lost educational expenses, expenses of visitors, housekeeping and home maintenance, damage to personal items, death benefits, funeral benefits, dependant care benefits, indexation benefits, and finally, increased medical, rehabilitation, and attendant care benefits.
Additionally, starting July 1, any of those optional Accident Benefits that you select for your auto policy will only apply to:
- The named insured
- The spouse of the named insured
- Dependants of the named insured and of the named insured’s spouse
- People specified in the policy as drivers of the automobile
Prior to these changes, Accident Benefits could, in certain circumstances, extend to individuals such as pedestrians, cyclists, or passengers involved in an accident. Under the new rules, those individuals may no longer be eligible for optional Accident Benefit coverage unless they fall into one of the categories listed above.
These changes to mandatory coverages and who is covered by Accident Benefits, apply to all Ontario automobile insurance policies, including those covering cars, trucks, SUVs, motorcycles, snowmobiles, ATVs, and other recreational vehicles.
While having more choice is always beneficial for consumers (and it’s one of the advantages of working with an insurance broker in the first place!), those choices should be made with a clear understanding of the protection you’re giving up. Before deciding whether to remove any of these optional coverages, it’s important to know what each one provides and how it could help you following an accident.
Optional Accident Benefits Coverages, Explained
Every driver’s situation is different. While one person may have adequate protection through workplace benefits or other insurance policies, another person may rely heavily on their automobile insurance following an accident. Before making any changes to your accident benefits coverages, it’s important to understand what each optional coverage provides and whether it’s useful for your individual circumstances.
# 1 – Income Replacement
This provides weekly payments if injuries prevent you from working after a car accident. The benefit helps replace a portion of your lost income while you recover, when are unable to work. This benefit is particularly important for individuals who rely on employment income in order to pay their bills.
#2 – Non-Earner Benefit
The non-earner benefit provides financial support for individuals who are not employed at the time of an auto accident, but are unable to perform their normal daily activities due to injuries. This benefit may apply to students (both teen drivers or those in college/university), unemployed individuals, stay-at-home parents, or retirees whose lifestyle is significantly affected by the accident.
#3 – Caregiver Benefits
This benefit helps cover the cost of replacing caregiving responsibilities if the injured person is the primary caregiver for dependants, such as young children, elderly family members, or individuals with special needs. Caregiver Benefits may provide financial support to help cover the cost of childcare or assistance for an aging parent or family member who previously relied on the injured person for care.
#4 – Lost Educational Expenses
This benefit helps cover certain education-related costs if a student must withdraw from or delay a program due to accident-related injuries. It may help offset tuition and program costs that are lost because studies must be postponed.
#5 – Expenses of Visitors
Visitor expenses help cover certain costs for family members or loved ones visiting an injured person during extended treatment or recovery following an auto accident. This may include travel expenses or accommodation costs in situations where the injured person’s recovery is taking place away from where family members live. For example, parents visiting from another country while their injured child recovers from an auto accident in the hospital.
#6 – Housekeeping and Home Maintenance
This benefit helps pay for household services that the injured person cannot perform due to their injuries. Examples may include cleaning, laundry, yard work, or other basic home maintenance tasks.
#7 – Damage to Personal Items
This benefit helps cover damage to personal belongings caused by the accident. Examples may include prescription glasses, hearing aids, mobility devices (such as wheelchairs or walkers), or other items damaged during the collision.
#8 – Death Benefits
Death benefits provide a lump-sum payment to eligible surviving family members if an insured person dies as a result of a motor vehicle accident. The benefit is intended to provide immediate financial support during a difficult time.
#9 – Funeral Benefits
Funeral benefits help cover certain funeral and final expenses related to a fatal motor vehicle accident. This can reduce the financial burden on surviving family members when arranging final services.
#10 – Dependant Care Benefits
Dependant care benefits help cover additional expenses for employed individuals who care for children, a spouse, or aging dependants. If injuries make it difficult to manage caregiving responsibilities outside work hours, this benefit can help offset those extra costs.
#11 – Indexation Benefits
Indexation benefits adjust certain weekly payments and coverage limits over time to reflect inflation. This helps maintain the real value of benefits if recovery extends over a longer period of time.
#12 – Increased Medical, Rehabilitation, and Attendant Care Benefits
Drivers may increase the standard limits for medical treatment, rehabilitation, and attendant care. Higher limits provide additional protection in the event of a serious injury requiring extended treatment or long-term care.
Will I Save Money by Removing Optional Accident Benefit Coverages?
The most common question we are hearing from clients as a result of these changes is: will I save any money by removing these optional Accident Benefit coverages? Unfortunately, policyholders expecting big cost savings are going to be disappointed. It is anticipated that removing many of these optional coverages will save on average $1 – $4* per coverage, with the removal of income replacement coverage generally having the most impact on premium. So, while there certainly are some savings to be had, don’t expect a major change in your insurance premium if you choose to remove coverage.
The limited savings offered make it important to consider what Accident Benefit coverages you really need. While it’s always great to save a few bucks, if it means not having coverage such as income replacement, caregiving benefits, or funeral benefits at a time when you and your family might really need them, the savings might not be worth it.
When Can I Make Changes to My Policy?
Customers can opt-out of optional Accident Benefit coverages at any time after July 1, 2026, regardless of their policy renewal date. While automobile policies will automatically renew with the coverage and limits that were in place prior to July 2026, customers may choose to remove coverages from their policy depending on their needs.
However, we do encourage you to make these changes to optional Accident Benefits coverages at policy renewal. Several insurance companies have decided that in order for consumers to remove optional Accident Benefits coverages from their policy, the existing policy must be cancelled and rewritten – meaning you would be required to pay the company a mid-term cancellation fee. By waiting until policy renewal to make changes, you avoid the cancellation fee, and the changes can take effect on your next policy renewal.
More Choice AND More Risk?
There has been plenty of discussion throughout the insurance industry about Ontario Auto Reform and whether making Accident Benefits optional is the right approach. While opinions may differ, one thing is certain: drivers now have more choice than ever before when it comes to customizing their automobile insurance.
At Excalibur Insurance Group, we believe having more choice is a good thing. After all, every driver’s circumstances are different. We recognize that teen drivers will have different needs than gig workers, who will have different needs than retirees or families with young children.
However, it’s important to acknowledge that having more choice, also means more responsibility being placed in the hands of consumers. Auto insurance coverage exists to provide financial support when your life takes an unexpected turn. So before removing any optional Accident Benefit coverages, it’s important to understand not just what you’re saving, but also what you might be giving up.
How Do I Know What Accident Benefit Coverages Are Right for Me?
Understanding which coverages are right for you isn’t always straightforward. That’s why we’ve put together an overview of the changes and coverages in this blog, along with creating an entire webpage dedicated to explaining these updates and answering frequently asked questions from consumers.
If you’re looking for a more interactive way to explore your coverage options, you can also try our Top It Up or Give It Up experience, which provides examples of real-life scenarios so you can see how each optional Accident Benefit could impact you and your family.
And, as always, if you’d like to review your coverage with a professional, an Excalibur Insurance Group broker is always happy to help. You can contact us at 1-888-298-7343 or click to get a quote below.
