Major Ontario auto insurance changes took effect on July 1, 2026. Only three accident benefits are still mandatory: medical, rehabilitation and attendant care. Income replacement, death and funeral, caregiver and several other benefits are now optional, so you decide whether to keep them when you buy or renew a policy.
The province framed the reform as giving drivers more choice over what they pay for. That choice comes with a trade-off. Dropping a benefit saves a little each month, but it can leave a large gap if you are injured.
What changed on July 1, 2026?
Accident benefits are the part of your auto policy that pays you after a collision, no matter who caused it. Before July 1, 2026, every Ontario policy included a full standard package. Now that package is split into mandatory and optional benefits.
| Accident benefit | Status since July 1, 2026 | Mainly protects |
|---|---|---|
| Medical and rehabilitation | Mandatory. | Anyone injured in a collision. |
| Attendant care | Mandatory. | People who need personal care after a serious injury. |
| Income replacement | Optional. | People who would lose earnings while they recover. |
| Non-earner | Optional. | Students and others without employment income. |
| Caregiver | Optional. | People who care for a dependant at home. |
| Housekeeping and home maintenance | Optional. | Households that would need paid help. |
| Death and funeral | Optional. | Surviving family members. |
| Visitor, education and personal-item expenses | Optional. | Families, students and people whose glasses or devices are damaged. |
A few other rules came with the change. According to industry guidance, optional benefits cover only the named insured, their spouse, their dependants and listed drivers. Existing coverage generally continues unless you choose to change it. The Insurance Bureau of Canada has a plain-language summary of the reform. Auto insurance in Ontario is regulated by FSRA.
Some parts of your policy did not change. Third-party liability is still mandatory, with a legal minimum of $200,000. Higher limits, such as $1 million or $2 million, are widely available and worth considering. Direct Compensation – Property Damage (DCPD) has been optional since January 1, 2024.
How much can you save by opting out?
Early industry estimates put the saving from dropping the optional benefits at about 5% of the average premium. That works out to roughly $10 a month. Your number may be higher or lower. It depends on your insurer, your profile and which benefits you drop.
That saving is modest compared with the risk. Income replacement is now optional, and it is the benefit that protects your paycheque. If a crash kept you off work for even a few months, the lost income would likely be far more than a year of savings.
Ask your insurer or broker for the price of each optional benefit separately. Some may cost very little on their own. You can then keep the ones that matter to you and drop the rest.
Tip: Ask for a written quote with and without each optional benefit. Seeing the dollar difference side by side makes the decision much clearer.
Who should keep income replacement and other optional benefits?
Optional benefits deserve a close look if losing your income would hurt your household. You may want to keep income replacement if you are:
- Self-employed or a contractor with no employer disability plan.
- A rideshare or delivery driver who earns money with your car. Our gig driver insurance guide covers this in detail.
- The main or only earner in your household.
- An employee with limited sick leave or no short- or long-term disability coverage.
- Someone whose mortgage, rent or debt payments depend on steady pay.
Other optional benefits fit other situations:
- Death and funeral benefits matter if anyone depends on you financially.
- Caregiver benefits matter if you care for children or another dependant at home.
- Non-earner benefits can matter for students and others who are not working.
- Housekeeping benefits matter if you could not manage your home after an injury.
Workplace or personal disability insurance can fill part of the gap. Check how much it pays, how long it pays and when payments start. Our guide to critical illness vs disability insurance explains how income protection works outside your auto policy.
Who might reasonably opt out?
Opting out can make sense in some cases. A retiree with no employment income gains little from income replacement. Someone with strong disability benefits at work may need less from an auto policy. Still, check the details before you drop anything.
Group plans often end when you leave a job. Some pay only part of your income or start after a waiting period. A benefit you drop today may be one you need after a career change.
Make the decision on purpose. Do not let a default setting on a new quote make it for you.
How to review your policy at renewal
The Ontario auto insurance changes turn every renewal into a decision point. Use this checklist:
- Find the accident benefits section. Look at your renewal package or policy declarations. Note which optional benefits are listed.
- Ask what a new quote includes. If you are switching insurers, ask which benefits the quote includes. Do not assume it matches your old policy.
- List your other coverage. Include workplace benefits, personal disability insurance and emergency savings.
- Price each benefit. Ask what each optional benefit costs and what limit it pays.
- Consider higher limits. Optional higher limits for medical, rehabilitation and attendant care can be added. Ask about income replacement limits too.
- Get it in writing. Confirm your choices by email or in your policy documents.
- Review again when life changes. A new job, self-employment, a baby or a new mortgage can all change the answer.
Before the reform, the standard income replacement benefit paid 70% of gross income, up to $400 a week. Ask what your insurer offers now and whether higher weekly limits are available.
Tip: Write down why you kept or dropped each benefit. At your next renewal, you can quickly check whether your reasons still apply.
Next steps
Your renewal is the right moment to review how the Ontario auto insurance changes affect you. Start with an instant car insurance estimate to see a realistic price range for your profile. Then talk to a licensed advisor who can compare insurers and explain each optional benefit in plain language.
You can also read more about Ontario car insurance, look up terms in our insurance glossary or see what else is changing in Ontario insurance.
This guide is general information. Your policy wording and a licensed advisor's advice apply to your own situation.