The Ontario government will move forward with “auto insurance reforms” as part of its 2024 provincial budget.
Very few details have been released, but the idea is to avoid duplication with workplace health plans while also providing Ontarians with more options.
Drivers will continue to pay into mandatory auto insurance, which covers health and personal injury.
After that, it would be up to the driver to opt in or out of the other optional benefits listed under the Statutory Accident Benefit Schedule.
This includes damage to property, death benefits, expenses to visitors, income replacement benefits and home maintenance benefits.
“This would provide drivers with an opportunity to lower their premiums by taking advantage of a wider range of coverage options to meet their needs,” the 2024 budget explains.
An example provided by officials is that drivers who have access to benefits through their workplace would not need to double up.
“What we're really focussed on is making sure that we provide as much choice and convenience,” Finance Minister Peter Bethlenfalvy said.
“And by that I mean that you have options, that we continue to continue to look at ways to innovate and encourage competition in the market so that we can have a robust level of auto insurance coverage at reasonable prices in this province.”
Bethlenfalvy said he did not have an estimate on how much these changes may save drivers in the long run, noting that it depends on a number of factors such as driver history and coverage choices.
The government already made auto insurance changes in January, giving motorists the option not to buy into direct compensation property damage (DCPD) coverage, which protects car owners from costs related to vehicle damage from a collision if they are not at fault.
This coverage also covers the loss of the vehicle or its contents.
While opting out will reduce the driver’s bill, it also means they will not be reimbursed for vehicle repairs, loss of a vehicle or its contents, or a replacement vehicle, among other items.
It’s unclear how much drivers can save on average by opting out of this coverage, however Morgan Roberts, director of RH Insurance, previously told CTV News Toronto it’s likely “not a significant savings.”
“You're opting out of any coverage in the event of…a not-at-fault-accidents,” she said in November.
“So if you're not at fault for an accident that happens, you're not going to be reimbursed for [the] replacement value of the vehicle. No loss or damage. There won't be any repair costs, towing costs, anything like that. You're opting out of all of it.”
Ontario's auditor general said in a 2022 report that average auto insurance premiums in the province increased by 14 per cent between 2017 and 2021, to $1,642.
According to a 2023 May report by Ratesdotca, insurance premiums in Ontario have risen about 12 per cent in 2023 compared to 2021, averaging at about $1,766.
