The biggest risk Ontario drivers face after the July 1 auto insurance reforms is not the changes themselves – it is making decisions based on price alone, according to Elliott Silverstein (pictured), director of government relations at CAA Insurance.
"Lowest price should not be the only element, because that lowest price could be very bare bones, and very limited," Silverstein said. "Whereas for a couple of dollars more with another provider, you could have a complete suite of coverages (or something very close to it) and be fully protected."
The reforms move most accident benefits from mandatory to optional, giving policyholders the ability to customize what is in their policy. Silverstein said that shift puts real power in consumers' hands, but only if they understand what they are choosing.
"It's only going to be as good as the knowledge that people have to make those decisions," he said.
He said the first thing drivers should know is that if they are satisfied with their current coverage, they can carry it over at renewal. Nothing forces a change.
"If you're happy and you get your insurance renewal, you can continue with your provider under the policy you have," he said.
The problem, Silverstein said, is that most drivers do not understand what is in their policy to begin with. Many receive their paperwork and roll it over without reading it, not because they do not care, but because the system is confusing and they are busy.
"People will complain about the pricing, not the contents," he said.
That pattern becomes riskier in a system where coverages are no longer automatic. A driver who drops a benefit to save a small amount on their premium may not grasp what they are giving up until a claim forces the question.
"You may hypothetically save $25 today, but you could be paying $2,500 if you run into a situation," Silverstein said. "This is not about being at the grocery store and making the determination between one brand versus another. This has significant implications down the road."
He said there are narrow scenarios where the changes could benefit certain drivers. A retiree who is no longer earning an income may see little reason to pay for income replacement coverage. Someone whose employer benefits already include disability coverage may view the overlap as redundant.
But both come with caveats. Silverstein noted that a driver who drops accident benefits because they are covered at work may forget to add them back after switching jobs – particularly during the waiting period before new employer benefits take effect.
"The amount you're going to save is relatively negligible compared to what the total cost of your insurance policy is," he said.
Silverstein said CAA Insurance has been running a public education effort through its website, including a hub designed to help drivers understand the changes regardless of who their insurer is. But he acknowledged that education has limits – particularly for people who do not hold an auto policy at all.
Pedestrians, cyclists and transit users who are injured in a motor vehicle accident currently access benefits through the at-fault driver's policy. Under the new system, many of those benefits become optional, and non-drivers have no broker relationship through which to learn what has changed.
Silverstein said that insurers have been communicating directly with their policyholders, but reaching Ontarians who do not hold an auto policy remains difficult. "There are segments that could be uninformed or less informed," he said. "It is a challenge."
He said the most important step any driver can take before their next renewal is to speak with a licensed broker or agent rather than making changes in isolation.
"Don't do this in isolation," he said. "There are many elements here that are new, and you want to make sure that you're not just looking at it from a price perspective."
Silverstein said it is too early to predict how consumer behaviour will shift, and that meaningful data will likely take three to six months to materialize. But the risk he wants to prevent is clear.
"We never want anybody to encounter a situation where they have that buyer's remorse later – that they wish they had listened to their agent or broker, that they wish they had trusted their judgment and stayed with what they had," he said.
