HIGHER PREMIUMS, SAME COVERAGE

Changes to Auto Insurance, Effective July 1, 2026

As of July 1, 2026, individuals renewing their auto insurance will be faced with a decision to pay more for the same coverage or reduce key components of their existing coverage. Changes to the Accident Benefits Schedule will come into effect on July 1, 2026. These changes are being implemented to the benefit of insurance companies at the expense of consumers.

Currently, individuals involved in a car accident are entitled to the following benefits from their auto insurer:

• Medical Rehabilitation and Attendant Care benefits

o   3,500 for minor injuries up to 5 years

o   65,000 for non-minor injuries up to 5 years

o   1,000,000 for catastrophic injuries over life

• Income Replacement benefits if unable to work due to injuries sustained in an accident (70% of pre-accident weekly income up to $400 per week) or a Non-Earner Benefit of $185 per week

• Reimbursement for expenses such as Lost Educational Expenses, damage to Clothing, and Visitor Expenses

• Death and Funeral benefits (a death benefit of $25,000 to the insured’s spouse and $10,000 to each dependant and a funeral benefit up to $6,000)

• Housekeeping and Home Maintenance for Catastrophic injuries

• Caregiver benefit for Catastrophic injuries

As of July 1, 2026, entitlement to the above benefits will change drastically. Auto insurance policies will only provide coverage for medical rehabilitation and attendant care (mandatory coverage) while all other benefits will need to be purchased as optional add-ons (optional coverage).

Mandatory Benefits As of July 1, 2026	Optional Benefits as of July 1, 2026, that need to be purchased
Medical Rehabilitation and Attendant Care o   3,500 for minor injuries up to 5 years o  65,000 for non-minor injuries up to 5 years o 1,000,000 for catastrophic injuries over life
	Income Replacement Benefits
	Non-Earner Benefit
	Lost Educational Expenses
	Damage to Clothing
	Visitor Expenses
	Death and Funeral Benefits
	Housekeeping Benefit (now available to non-catastrophic injuries but must be purchased)
	Caregiver Benefit (now available to non-catastrophic injuries but must be purchased)

Key benefits, like the income replacement benefit, will become optional and individuals will need to pay more to purchase this optional benefit.

Other benefits to reimburse for lost educational expenses, damage to clothing, visitor expenses, death benefits and funeral expenses, will also become optional.  Individuals will need to pay more to maintain coverage for these benefits. As well, the housekeeping and home maintenance benefit and the caregiver benefit will become optional benefits regardless of whether one sustains a catastrophic injury or not. Again, individuals will need to purchase optional coverage for these housekeeping and caregiving benefits.

Ultimately, the effect of the changes coming into effect on July 1, 2026, is that individuals will need to pay higher premiums to purchase the same coverage to which they are currently entitled. Alternatively, individuals can choose to forego the optional benefits and will only be entitled to medical rehabilitation and attendant care benefits. This might result in marginal savings but will have significant ramifications if one is injured in an accident. For example, an individual will not receive any income assistance from their auto insurer in the event they get into an accident and are unable to work. This potential outcome likely outweighs any savings in not purchasing this optional benefit.

The changes to the Accident Benefits Schedule also makes the Accident Benefit insurer the first payor of medical rehab benefits. The auto insurer will have priority for these payments over collateral insurers (ie. health plans through work).

The auto insurance industry has marketed the above changes as promoting “individualized and tailored” insurance to individuals with specific needs. However, the real effect of these changes will require Ontarians, who are already struggling with inflation, to pay more for the same insurance coverage while large insurance companies increase profits despite providing the exact same coverage and service. 

Another interesting effect of the above changes is that Ontario appears to be moving towards a more fault-based system of compensation even if unintentionally. An individual injured in an accident may claim benefits from their own insurer and sue the at-fault driver (ie. the Defendant in a lawsuit) for damages beyond what is available through accident benefits. An award for income loss made against the Defendant is reduced by income replacement benefits received by the Plaintiff from their own accident benefits insurer. If a Plaintiff does not purchase optional income replacement benefits, then the defendant and its insurance company will not be able to deduct any income replacement benefit from an income loss award resulting in payment of a larger income loss award. In this situation, which may become quite common, more of the Plaintiff’s income loss will be recovered from the at-fault driver than from the no-fault accident benefits provider.

If you have been injured in a car accident call Hillier and Hillier at 905 453 8636.