Written By: Joseph Cescon, Partner & Alicia Abbott, Summer Student
9 Minute Read
Significant changes to auto insurance in Ontario are set to take effect on July 1, 2026, through reforms to the Statutory Accident Benefits Schedule (SABS). Under the new rules, several benefits that were previously mandatory, including income replacement and caregiver benefits, will become optional. The scope of coverage for these benefits will also be narrowed, with eligibility limited to the named insured, their spouse, and their dependants.
The decisions made when purchasing or renewing an auto insurance policy can have lasting consequences for your future quality of life. This is because the impacts of an injury can extend far beyond medical treatment. An injured person may be unable to work, care for family members, continue their education, or manage everyday responsibilities. Many of the benefits that are becoming optional are designed to provide support in precisely these circumstances. To avoid surprises when coverage is needed most, it is important to review your current plan, reflect on your specific needs, and consult with your insurance provider to ensure you have the protection that is right for you.
What are Statutory Accident Benefits?
In Ontario, every auto insurance policy includes a set of mandatory benefits set out in the Statutory Accident Benefits Schedule. These benefits have traditionally been available to everyone, regardless of who was at fault for the accident. Their purpose is to provide financial and rehabilitative support to individuals who are injured or suffer losses as a result of an accident. Depending on the circumstances, SABS may help cover expenses such as medical treatment, rehabilitation, and attendant care.
What Benefits are Becoming Optional?
Beginning July 1, 2026, several benefits that were previously included in every auto insurance policy will become optional. Drivers should understand which benefits are no longer mandatory in order to make informed decisions when renewing, adjusting, or purchasing insurance. The decisions made before an accident occurs are critical, as they will determine the level of support available to you follow an auto accident.
| New Optional Benefit | What the Benefit Covers | Example |
| Income Replacement | Helps replace the income an insured person may lose because of an accident. [1] | A police officer who is unable to return to work due to physical injuries relies on income replacement coverage to pay their mortgage while they recover. |
| Non-Earner | Helps financially support an insured non-earner (unemployed, retired, or students) whose injury keeps them from leading a normal life. [2] | A university student whose brain injury prevents them from attending relies on non-earner benefits to assist with living costs. |
| Caregiver Benefits | Helps cover caregiving expenses of an insured person who can no longer provide care for a household member who needs it. [3] | A stay-at-home parent who fractures their spine uses this benefit to hire a professional child care service for their young children. |
| Lost Educational Expenses | Helps cover educational expenses of an insured person whose injuries prevented them from attending the program. [4] | A college student who is forced to withdraw from their program due to a severe concussion uses this benefit to recover their lost tuition fees. |
| Expenses of Visitors | Helps cover the expenses of visitors (such as family members) if an insured person was injured as a result of the accident. [5] | An injured driver’s parents use this benefit to cover their hotel stay while traveling to visit them in the hospital while they recover. |
| Housekeeping and home maintenance | Helps cover the costs of an insured person to purchase housekeeping services if they are unable to perform the housekeeping tasks they normally did before an accident. [6] | A homeowner who has injured their back in a collision uses this benefit to hire a service to handle cleaning, laundry, and yard work. |
| Damage to personal items | Helps cover the costs to repair or replace an insured person’s personal items damaged during an accident. [7] | A driver utilizes this benefit to replace their prescription eyeglasses that were broken during a collision. |
| Death Benefits | Compensates family members if an insured person dies due to an accident. [8] | Following a fatal collision, a lump-sum payment is issued to the surviving insured person’s spouse. |
| Funeral Benefits | Helps cover the funeral costs if an insured person dies due to an accident. [9] | The family of a deceased driver uses this benefit to offset the costs of a memorial service. |
How do I Know if I have to Opt in?
If you are an existing customer of an auto insurance policy, it will renew with the same coverage limits unless you specify to your insurer, in writing, that you want to decline the benefits or make changes to them. [10] However, you will need to opt in for the newly optional benefits when you are purchasing a new policy on or after July 1, 2026. [11] The is particularly important for newly insured vehicle drivers in Ontario.
Why Do The Newly Optional Benefits Matter?
While many people focus on the injuries resulting from a motor vehicle accident, it is often overlooked how these injuries can affect every aspect of a person’s life. For example, a person who is unable to work may suddenly lose their primary source of income and no longer be able to maintain their ongoing expenses. A student may be forced to withdraw from school, compromising their ability to complete their education and enter the job market. Drivers should carefully consider the potential consequences of foregoing this coverage before deciding whether to maintain or opt out of it. The minimal savings in the short term are unlikely to be offset if you need the coverage later.
How Much Will It Cost to Maintain Optional Benefits?
The cost of maintaining optional benefits will vary depending on the insurer and the specific coverage selected. Current media reports have suggested that the savings of opting out of the benefits would be around 10 dollars a month or 5% of your premium. [12] These savings should be considered in the context of the potentially significant financial consequences that can arise following a serious injury.
Who Can Qualify for Optional Benefits?
Under the rule changes, those who qualify for optional benefits is being restricted. Optional benefits will only apply to: [13]
- The named insured
- The spouse of the named insured
- Dependents of the named insured and of the named insured’s spouse
- Persons specified in the policy as drivers of the automobile
Certain optional benefits may no longer be available to passengers, pedestrians, or cyclists who do not fall within these categories. As a result, drivers may wish to discuss these changes with family members and friends who could be affected, as they may not be entitled to these optional benefits if they are injured in an accident involving the insured vehicle.
How Can I Prepare?
There are several steps drivers can take before the changes come into effect:
- Review your current auto policy and understand your current benefits
- Identify optional benefits l and consider if they are important to you.
- Speak with your insurer about the coverage options available to you.
- Ask questions so you understand the impact of declining optional benefits.
Conclusion
The July 1, 2026 accident benefit changes represent a fundamental shift in how Ontarians are protected after a car accident. The best way to prepare is to understand your coverage, assess your needs, and make informed decisions before an accident occurs. A conversation with your insurer today may help protect your financial security and ensure you have access to the support you need following a motor vehicle accident.
SOURCES:
[1] SABS, s 5(1).
[3] Ibid, s 13(1); FSRA, FACT SHEET: 2026 Accident Benefits Reforms What Ontario Driver Need to Know
[10] Ibid, supra note 6 at 1.
[11] Ibid.
[12] Major changes are coming to auto insurance benefits on July 1, here is what you need to know
[13] FSRA at 4.
