Ontario's most significant auto insurance reform in years will come into effect on July 1, reshaping the province's Statutory Accident Benefits Schedule, or SABS, and shifting significant coverage decisions from default inclusion to active consumer choice.
Below are what will change when the policy is implemented this week and what it means to the insurance market in general.
On July 1, medical, rehabilitation and attendant care benefits remain the only mandatory accident benefits under Ontario auto policies. All other accident benefit coverages are now optional, including income replacement, non-earner benefits, caregiver benefits, death benefits and funeral expenses. These were previously embedded as standard in every policy.
Auto insurance has also become the first source of coverage for accident-related medical and rehabilitation expenses before other health coverage such as employer group benefits or private health insurance, with the exception of medication costs. Policyholders with workplace benefits plans should be made aware of how this sequencing affects their overall coverage picture.
One of the more consequential aspects of the reform involves the narrowing of who qualifies under optional benefits. Optional accident benefits now only cover the named insured, the spouse of the named insured, dependants and any listed drivers. This change applies across all Ontario auto insurance policies from July 1, regardless of renewal date.
Pedestrians, cyclists and certain passengers who may have been covered previously may no longer be eligible for optional accident benefits unless they fall within that defined class. Mandatory medical, rehabilitation and attendant care benefits remain available to all accident victims regardless of their connection to the policy.
For renewing customers, coverage continues automatically at existing levels unless the policyholder agrees in writing to remove or change benefits. New or updated policies taken out from July 1 onward will offer the scaled-back mandatory baseline, with optional benefits available to add.
The Registered Insurance Brokers of Ontario has advised that changes to optional benefits can only be made using a completed CSIO Optional Accident Benefits Broker Client Consultation Form. Thorough documentation of client conversations and decisions will be critical for managing errors and omissions exposure as more coverage decisions shift to the client.
Ontario's auditor general identified the province as having the highest auto insurance rates in the country in a 2022 report that prompted this reform. However, industry voices have been measured about how much rate relief consumers will actually see.
Lance Miller, CEO of Surex Insurance, estimates the average consumer can save $100 to $200 annually by opting for the most basic coverage, but cautions that opting out of funeral benefits, for example, might cut $30 to $50 from a premium while leaving a family exposed to costs running into the tens of thousands.
Daniel Ivans, broker and insurance expert at rates.ca, points to the 2016 reform under the then-Liberal government, which similarly reduced benefit limits without producing lasting rate reductions.
"Over the last 10 years, vehicle thefts and climate change have really pushed auto insurance to new heights," he said, adding that shopping around different insurers tends to be a more effective route to lower premiums than cutting coverage.
Miller said the reform requires a broader shift in how consumers approach the coverage decision. "It's going to be: 'What really covers me and how do I find what I really need to cover myself at the best price?'" he said.
RIBO and the Financial Services Regulatory Authority of Ontario have both emphasized that this is not a wait-until-renewal change. Policyholders should be hearing about the reforms through proactive outreach from brokers, not just through renewal notices.
A joint training course developed by the Insurance Brokers Association of Ontario, the Insurance Institute of Canada and the Ontario Mutual Insurance Association has been available since January 2026 for any brokers who have not yet completed it.
