Updated October 2026 

Ontario introduced significant changes to automobile insurance on July 1, 2026. These changes give drivers more flexibility in choosing certain accident benefits, but they also make it more important to understand what protection your policy provides.

While having more choices may help some drivers reduce their insurance premiums, removing coverage could leave you facing significant financial expenses if you are injured in an automobile accident.

At L.D. Dermody Insurance Brokers, we believe it is important for our clients to understand these changes before making decisions about their coverage.

What Changed on July 1, 2026?

Ontario automobile insurance policies include Statutory Accident Benefits, which provide certain benefits to people injured in automobile accidents, regardless of who was responsible for the accident.

Before July 1, 2026, several of these benefits were automatically included in automobile insurance policies.

Under the new rules, only medical, rehabilitation and attendant care benefits remain mandatory. Other accident benefits, including income replacement, are now optional.

This means drivers purchasing new automobile insurance policies have more choices about the benefits they wish to include.

However, just because a coverage is optional does not mean it is unnecessary.

What Coverage Is Still Mandatory?

Medical, rehabilitation and attendant care benefits continue to be included in Ontario automobile insurance policies.

These benefits can help pay for expenses such as:

• Medical treatments and rehabilitation services following an accident.

• Physiotherapy, occupational therapy and other eligible treatments.

• Attendant care services for individuals who require assistance with daily activities following an injury.

Standard coverage generally provides up to $65,000 for eligible medical, rehabilitation and attendant care expenses for non-catastrophic injuries, and up to $1 million for catastrophic injuries, subject to the applicable policy provisions and benefit limits.

Additional coverage limits may be purchased.

What Accident Benefits Are Now Optional?

Several important benefits that were previously included in standard automobile insurance policies can now be selected or declined.

Income Replacement Benefits

If you are unable to work because of injuries sustained in an automobile accident, income replacement benefits can help replace a portion of your lost income.

The standard available benefit generally provides 70% of gross income, up to a maximum of $400 per week, subject to eligibility requirements and other applicable provisions.

Higher weekly limits of $600, $800 or $1,000 may be available for an additional premium.

Consider someone earning $70,000 annually who is seriously injured and unable to work for several months.

Without income replacement benefits, that person could find themselves without an important source of financial support while recovering.

Non-Earner Benefits

These benefits may provide financial assistance to eligible individuals who do not qualify for income replacement benefits but suffer injuries that prevent them from carrying on a normal life.

Students, retirees and individuals who are not employed may wish to consider this coverage.

Caregiver Benefits

If you provide care for children or other dependants and are unable to continue those responsibilities because of an automobile accident, caregiver benefits may help pay for replacement care, subject to the coverage selected and eligibility requirements.

Housekeeping and Home Maintenance Benefits

An injury could prevent you from performing household duties such as cleaning, maintaining your home or completing other necessary tasks.

This optional coverage may help pay for eligible replacement services.

Death and Funeral Benefits

These benefits can provide financial assistance to eligible family members following a fatal automobile accident and help with funeral expenses.

Other Optional Benefits

Additional benefits include dependant care, lost educational expenses, expenses of visitors, damage to personal items and indexation benefits.

The availability, limits and eligibility requirements vary depending on the benefit and insurance policy.

What Happens to Existing Automobile Insurance Policies?

One of the most important things for existing policyholders to understand is that your accident benefits do not automatically disappear simply because the rules have changed.

If you had an automobile insurance policy before July 1, 2026, your existing accident benefits generally continue when your policy renews, including the coverage limits you previously selected, unless you agree in writing to make changes.

Your insurance company may provide information about the new coverage options when your policy comes up for renewal.

Before deciding to remove any benefits, it is important to understand what you currently have and what you could be giving up.

Will Removing Optional Benefits Save Money?

Choosing to remove certain accident benefits may reduce your automobile insurance premium.

However, the savings will depend on the insurance company, the benefits being removed and your individual policy.

It is important to weigh any premium savings against the potential financial consequences of being injured in an accident.

For example, saving a relatively small amount on your annual premium may not be worthwhile if you subsequently lose access to income replacement benefits while unable to work.

Insurance is intended to protect you from financial losses that could be difficult to manage on your own.

What If You Have Benefits Through Your Employer?

Some drivers may already have disability insurance, extended health benefits or other protection through their employer.

While these benefits should be considered when reviewing automobile insurance coverage, they are not necessarily a complete replacement for accident benefits.

Employer benefit plans may have different eligibility requirements, payment limits, waiting periods and exclusions.

It is also worth considering what would happen if you changed employers, lost your job or retired.

Before declining automobile accident benefits because you have other insurance, make sure you understand how those benefits would respond following an automobile accident.

Who Is Covered by Optional Accident Benefits?

Another important change concerns who may qualify for optional accident benefits.

Under the new rules, optional accident benefits generally apply to the named insured, their spouse, their dependants and drivers specifically listed on the automobile insurance policy.

This makes it particularly important to ensure that your insurance broker is aware of everyone who regularly drives your vehicles.

Failing to properly identify drivers could have consequences for the optional accident benefits available following an accident.

What Should Ontario Drivers Do?

The changes to Ontario automobile insurance provide more flexibility, but they also place greater responsibility on consumers to understand their coverage.

When reviewing your automobile insurance policy, consider:

• Whether you could manage financially if an accident prevented you from working.

• Whether you have disability or extended health benefits through your employer.

• Whether family members depend on your income or caregiving responsibilities.

• Whether your existing accident benefit limits would provide sufficient protection.

• Whether the premium savings from removing coverage justify the additional financial risk.

There is no single combination of coverages that is right for everyone.

Speak With Your Insurance Broker Before Making Changes

At L.D. Dermody Insurance Brokers, our role is to help clients understand their insurance coverage and make informed decisions.

Although the new automobile insurance rules may provide opportunities to reduce premiums, we encourage clients to carefully consider the protection they could be giving up.

The least expensive automobile insurance policy is not necessarily the policy that provides the best protection when you need it most.

If you have questions about the changes to Ontario automobile insurance or would like to review your current accident benefits, please contact our office.

We would be pleased to explain your options and help you determine what coverage best suits your needs.

This article provides general information about Ontario automobile insurance changes effective July 1, 2026. Coverage is subject to the terms, conditions, limits and exclusions of the applicable insurance policy and Ontario's Statutory Accident Benefits Schedule.