Ontario Auto Insurance Just Changed: What’s Now Optional And How To Protect Yourself

As of July 1, 2026, the Ontario government amended the Statutory Accident Benefits Schedule (SABS) to help lower auto insurance premiums for drivers. While this could mean savings on their insurance it can have devastating consequences if they have an accident and don’t have the coverage they need.

The majority of coverages people previously had, such as income replacement, death and funeral benefits, and visitor expenses, became optional. So, while your policy will renew with the same coverages you had before July 1, 2026, you can delete them. If you start a new policy, you are only given three mandatory coverages – medical and rehabilitation benefits and attendant care. People don’t understand insurance policies at the best of times. They won’t know why they need to add back some, if not all, the mandatory coverages.

Here’s exactly what changed, who’s most exposed, and the steps to take before your next renewal.

What Changed on July 1, 2026

The Ontario government amended the Statutory Accident Benefits Schedule (SABS) to help lower auto insurance premiums. To do that, it converted a long list of previously mandatory accident benefits into optional add-ons.

Still mandatory after July 1, 2026:

• Benefit: Medical, Rehabilitation & Attendant Care
• Amount: $3,500 if placed in the Minor Injury Guideline (MIG); $65,000 if removed from the MIG; and up to $1,000,000 if designated catastrophic

Now optional (was mandatory before July 1, 2026):

• Income replacement benefit (was up to $400/week)
• Non-earner benefit (was $185/week for 104 weeks)
• Caregiver benefit (was $250/week for the first person cared for, $50/week per additional person/child)
• Housekeeping and home maintenance benefit
• Death and funeral benefits (was $25,000 to a spouse, $10,000 per dependent, $6,000 for funeral costs)
• Visitor expenses
• Educational expenses (was up to $15,000)
• Damage to personal items (glasses, hearing aids, clothing, etc.)

A New Coverage Gap: Who’s Actually Insured

Beyond the optional-benefits shift, the reform also narrowed who is automatically covered under a policy. Before anyone injured in an accident in Ontario received the same benefits as anyone else. It didn’t matter if you were a pedestrian who didn’t own a vehicle or a driver. However, as of July 1, 2026, only certain groups of people will have access to the coverages on the vehicle at the time of the accident. Everyone else will be limited to the three mandatory coverages. That means if you keep all the coverages on your policy you will have access to income loss, death benefits, visitor expenses, funeral expenses, etc in the event of an accident. But your passenger may only have access to the mandatory medical/rehab and attendant care benefits. This is regardless of how badly injured they are or whether they have income loss coverage through work.

The four categories are as follows:

• The named insured (the vehicle owner)
• Their spouse
• Their dependants
• Drivers listed on the policy

Anyone outside those four categories such as a pedestrian, a cyclist, a child away at school who is no longer on the policy, or a licensed driver who isn’t named on a policy, no longer have an automatic path to accident benefits coverage if they’re hurt in an accident.

Who Should Be Most Concerned

• Pedestrians and cyclists who don’t fall into one of the four covered categories on any policy
• Licensed drivers not listed on a family member’s or friend’s policy
• People without paid sick leave, who would otherwise rely on income replacement or non-earner benefits after an accident
• People without life insurance or death benefits through their insurer

For these groups, the accident benefits that used to apply automatically may now simply not exist unless someone actively retained them on their policy or added them to a new policy.

Four Steps to Protect Your Coverage

1. If you’re already insured, don’t change a thing by accident. Existing policies retain all previously mandatory benefits. The risk is only at renewal, when you’ll be enticed to drop coverages to lower your premiums.
2. Get added to a policy if you’re not already on one. If you hold a driver’s license but don’t fit into the owner/spouse/dependant/listed-driver categories, ask a family member or friend to add you to their policy. Drivers over 25 often incur no additional charge, and you gain access to the same benefit levels as the policyholder. As an added bonus, you get a driving record by being insured in the event you want to buy a vehicle in the future.
3. Treat income replacement benefits, death and funeral benefits, and visitor expense coverage as a minimum, not a luxury. These protect your household’s finances if you’re seriously hurt or killed. Skipping them to save a small amount on premiums can leave a family without support exactly when it’s needed most.
4. Add the rest if you can. The remaining optional benefits: caregiver, housekeeping, educational expenses, personal item damage, typically cost only a few dollars more per policy and can matter significantly after a serious collision.

The Bottom Line

These changes were designed to lower premiums, but the savings come from shifting the choice, and the risk, onto individual policyholders. Before your policy renews, review every optional benefit line by line rather than just deleting coverage because you can. If you’ve already been in an accident and aren’t sure what your policy covers, our team can help you understand your rights under your specific benefits schedule.