Millions of Ontarians who do not own a car are about to lose meaningful accident benefit coverage without any mechanism to replace it – and most of them have no idea it is happening.
When Ontario's à la carte accident benefits reform takes effect on July 1, the change will not just affect drivers deciding which optional coverages to keep. It will strip protections from pedestrians, cyclists and public transit users who have never held an auto insurance policy and have no broker relationship through which to be warned.
"The coverage available to you on July 1st will be significantly less than what you had on June 30th," said Michael McNeill, Ontario operations manager and accident benefits supervisor at Crawford Canada.
Under the current system, anyone injured in a motor vehicle accident in Ontario – including pedestrians and cyclists struck by a car – can access a range of statutory accident benefits through the policy of the vehicle involved. Those benefits include income replacement, rehabilitation, and non-earner coverage.
After July 1, most of those benefits become optional add-ons that individual policyholders must actively purchase. The mandatory floor drops to medical, rehabilitation and attendant care only.
The problem for non-drivers is not just that those benefits are being made optional. It is that even if the driver of the striking vehicle has purchased the optional enhanced coverage, a pedestrian or cyclist cannot access it.
"Even if the driver of the striking vehicle has purchased the optional coverage and enhanced limits under the new policy, a pedestrian or cyclist would not be entitled to those benefits," said Brian Hambly, vice president of loss adjusting for Ontario at Crawford Canada. "That's where there would be a significant gap."
The same logic applies to public transit. Anyone riding a city bus that is involved in an accident falls outside the named insured structure entirely.
"If you take the city bus and it's involved in an accident, you would be limited to just the basic level of coverage – because you're not attached to that policy," McNeill said.
For working Ontarians who rely on transit, the financial consequences of a serious injury could be severe. Under the current system, income replacement benefits are set at $400 per week – a figure McNeill already considers inadequate, as “most people do not have enough liquid assets to sustain themselves for the duration of the recovery.”
With the cost of living continuing to rise, he added, this level of support leaves many injured individuals facing significant financial hardship during recovery.
"$400 per week would be very hard for most policyholders to get by on now," he said. "To go down to nothing would be devastating. You'd be relying on government, you'd be relying on the bank, you'd be relying on family and friends."
Those left without coverage will have two routes: a tort claim against the at-fault driver, or reliance on publicly funded systems such as OHIP and social assistance.
"They would have to rely on other means through either tort claim or reliance on other government-funded systems to recover," Hambly said. "So that's where there will be a pretty substantial change."
The tort route is not straightforward either. McNeill noted that only the not-at-fault party in an accident can pursue a tort claim, meaning a pedestrian or cyclist who is deemed at fault would have no recourse through that channel.
If they are partially at fault, then they can only recover the percentage of damages that corresponds to the portion in which they are not at fault. Any degree of contributory negligence reduces the amount they can recoup through a tort claim, he said.
“It’s also important to remember that the timeline for an injured party to receive funds from a tort settlement is significantly longer than receiving benefits under an accident benefits claim. Tort claims often take years to resolve, whereas accident benefits provide access to treatment and income support much earlier in the recovery process.”
What makes this exposure particularly difficult to address is the absence of any clear communication pathway to the people most affected. Drivers renewing policies will at least interact with a broker who can explain the changes – but even that interaction is no guarantee. Morgan Roberts, VP of RH Insurance at Ratehub.ca, said most policyholders cannot describe their own accident benefits coverage unprompted.
"I don't think the general public understands accident benefits," Roberts said.
Non-drivers have no equivalent touchpoint at all. "They won't get education because the only education they would get would be from the media," McNeill said.
"It raises an interesting question – are those people even allowed to buy a separate policy if they don't own a vehicle?"
That question remains unresolved. There has been industry discussion about whether non-drivers could purchase a standalone accident benefit policy, but McNeill said he does not consider it a realistic solution, at the moment, as there are no insurers currently offering this type of product.
“Until a market solution emerges, non‑drivers remain without a clear pathway to obtain independent accident benefits coverage outside of an auto policy.”
The reform is estimated by the Financial Services Regulatory Authority of Ontario to reduce average premiums by approximately 5% over time as policies renew. For Hambly and McNeill, that figure does not capture what is being traded away.
"Education will be key at all levels within the industry," Hambly said.
