Ontario drivers will have new decisions to make when renewing their auto insurance policies as the provincial government rolls out major changes.
Starting on July 1, nine out of 12 previously mandatory accident benefits will become optional. Under the provincial policy that was first introduced in the 2024 Ontario budget, medical, rehabilitation and attendant care benefits will still be mandatory.
The nine other categories that will become options are income replacement benefits, non-earner benefits, caregiver benefits, housekeeping benefits, visitor expense benefits, lost educational expenses, damage to personal items and death and funeral expenses.
The provincial government said the changes are meant to empower consumers with more options, but insurance experts warn trimming coverage to save a few dollars could leave drivers dangerously exposed.
Steve Lauzon, an insurance broker with Waterloo-based Donovan Insurance Brokers, said some drivers can afford to opt out of the ‘income replacement’ benefits depending on their stage of life.
“If you were involved in an auto accident and you had to use that benefit, that’s essentially like a disability benefit,” Lauzon said. “So, if you’re unable to work then they would supplement your income. But if you’re retired, you don’t need that coverage because you don’t have any income, so why pay for it?”
Lauzon said a lot of his clients are being cautious.
“If you remove certain things and then you do have an unfortunate incident, you could be at risk to not have coverage,” Lauzon said. “A lot of them are opting just to leave it because a dollar over the course of a year, or 15 bucks over the course of the year is not that much in the grand scheme of things.”
The changes also shift how coverage applies to other road users. Previously, a driver’s policy automatically extended full benefits to passengers, pedestrians or cyclists injured in a collision. After July 1, those people will only get mandatory medical and rehab benefits under the driver’s no-fault insurance. Extra benefits like income replacement will only kick in if those individuals carry that specific coverage on their own policies.
Some drivers may find they already have overlapping coverage through work or private plans.
“I have heard other people say, ‘Well, I have all these other benefits. I have a separate policy for health care and income replacement, so I don’t need it on my auto policy,’” said Anne Marie Thomas from the Insurance Bureau of Canada.
The changes will not happen automatically and will only take effect when a policy comes up for renewal after July 1. If no changes are made, policies will stay as is.
“If you want to change some of these coverages, you’re going to have to do so in writing,” Thomas said. “You’re going to have to send an email or sign a document that lets your insurance broker or agent know, ‘Yes, I want to remove this coverage or that coverage.’”
