Attention Drivers: Your Insurance Coverage is Disappearing. Updates to Ontario’s No-Fault Auto Insurance You Can’t Miss
- 25.11.2024
- Insights
In Ontario, injured motorists, passengers, and people struck by automobiles have access to disability benefits, called Statutory Accident Benefits Schedule (SABS). They are sometimes referred to as “no-fault benefits” because they are available if a person’s injury was the result of an automobile, regardless of fault. These benefits originally provided extensive amounts for lost income, non-earner benefits for those not working at the time of the collision, rehabilitation benefits, and housekeeping benefits. However, since their introduction in 1990 these benefits have been eroded by legislated changes and the erosive effect of inflation.
Recent legislative updates through Ontario Regulation 383/24, effective July 1, 2026, will again transform these benefits.
Under the new changes, coverage for income replacement benefits to cover lost wages will become optional. Consumers will have to be careful not to leave themselves exposed and underinsured.. Most consumers will be tempted to go with the cheapest option, but if they are in a collision and cannot work, they need to understand that they won’t have any income replacement unless they have opted in to pay extra for that coverage, or have their own private benefits. Insurance is a complicated issue, and many will default to the status quo out of uncertainty.
In this article by Darcy Romaine, senior counsel at Boland Romaine LLP and current director of the York Region Law Association, he writes on the new changes and its applications to ontarians.
The Original Auto Insurance Benefits
Previously, Ontario’s SABS ensured that a set of essential benefits were automatically included in all standard auto insurance policies. These benefits were designed to give accident victims critical financial assistance and included:
- Income Replacement: Financial compensation for those unable to work due to accident-related injuries.
- Non-Earner Benefits: Support for individuals not earning an income, such as students or unemployed individuals.
- Caregiver Benefits: Assistance for those responsible for dependents and needing financial support for caregiving duties.
- Medical and Rehabilitation Expenses: Coverage for necessary treatments and rehabilitation services.
- Death and Funeral Benefits: Financial aid for families who have lost loved ones in a motor vehicle accident.
These benefits provided fixed amounts across the board, offering consistency and security. For example, non-earner benefits were set at $185 per week, providing predictable and reliable coverage for policyholders.
| Type of Benefit | Benefits in 1996 | Anticipated as of July 1, 2026 |
| Medical and Rehabilitation (Non-Catastrophic) | Up to $100,000 over 10 years. | $3,500 for injuries within the guideline.
Up to $65,000 over 5 year for those with injuries outside the guideline. |
| Attendant Care (Non-Catastrophic) | Up to $72,000 | Included in the combined $65,000 limit for Medical and Rehabilitation. |
| Medical and Rehabilitation (Catastrophic) | $1,000,000 | $1,000,000.
Included in the combined $1,000,000 limit for Medical and Rehabilitation. |
| Attendant Care (Catastrophic) | $1,000,000 | |
| Income Replacement Benefit | 80% of net income up to $1,000 per week (approximately $1,700 in 2024 dollars) | Optional coverage; standard policies may not include this benefit unless selected. |
| Caregiver Benefit | Up to $250 per week for the first dependant, plus $50 for each additional dependant | Optional coverage; standard policies may not include this benefit unless selected. |
| Housekeeping and Home Maintenance Expenses | Up to $100 per week | Optional coverage; standard policies may not include this benefit unless selected. |
| Death Benefit | $25,000 to spouse; $10,000 to each dependant | Optional coverage; standard policies may not include this benefit unless selected. |
| Funeral Benefit | Up to $6,000 | Optional coverage; standard policies may not include this benefit unless selected. |
This means that, if you do not opt in to some of the benefits like income replacement benefit and non-earner benefit and are unable to return to work, you will not be able to claim for your lost income, which will be a significant loss when you are already in a vulnerable state.
The Shift to a Customizable Insurance System
With the introduction of Ontario Regulation 383/24, the landscape of auto insurance in Ontario is changing. Many key accident benefits are no longer mandatory but have become optional. While it will be marketed as giving policyholders greater flexibility in their coverage choices, in aggregate it will simply mean less coverage for the injured. Some of the benefits that are now optional include:
- Income Replacement Benefits
- Non-Earner Benefits
- Caregiver Benefits
- Housekeeping and Home Maintenance Benefits
- Lost Educational Expenses
- Visitors’ Expenses
- Coverage for Clothing Damage
- Death and Funeral Benefits
Responsibilities for Insurance Professionals
For insurance providers and brokers, these changes place greater responsibility on their shoulders, to help their clients make informed decisions, responsibly balancing cost savings with adequate protection.
What This Means for Families and Policyholders
For families in Ontario, this change in the insurance system introduces more uncertainty and responsibility onto the type of protection they choose. It’s now up to policyholders to assess their needs carefully and decide whether to opt into additional benefits.
- Do you want higher income replacement benefits if an injury prevents you from working?
- Do you already have a private short term and long term disability plan?
- Does your long term or short term disability plan have an exclusion for car accidents?
- How much does your private short or long term disability plan pay?
- How will foregoing the income replacement benefit affect a passenger in my car?
These questions are essential to consider, as opting into or out of benefits has significant implications. One crucial factor to note is that optional benefits must be selected and purchased before an accident occurs. You cannot add them retroactively, making it important to think ahead and plan for potential risks.
Your Rights to File a Personal Injury Claim
Even if you choose a leaner policy by opting out of certain benefits, your rights to compensation are not entirely lost. If you are injured in a motor vehicle accident, that is not your fault, you still have the option to file a tort claim. This legal claim allows you to pursue compensation for:
- Pain and Suffering: Emotional and physical distress caused by the accident.
- Loss of Income: Reimbursement for wages lost due to your injuries.
- Future Care: Lifetime treatment costs.
- Lost Domestic Labour: replacing the cost of work you performed at home. .
Tort claims provide an added layer of protection and an avenue to seek fair compensation, even if your accident benefits are limited by your policy choices. Understanding this dual layer of financial protection—both accident benefits and tort claims—can help you make more informed decisions about your auto insurance coverage.
What’s Next?
Ontario’s shift from mandatory to optional accident benefits represents a significant change in the financial protections the Ontario Government formerly mandated for its constituents. While this new flexibility allows for customized policies that suit varying needs and budgets, it also places greater responsibility on policyholders to make well-informed decisions. Consulting with an experienced insurance professional is now more important than ever to ensure you and your family are adequately protected on the road.
Remember, the choices you make about your coverage today could have long-lasting financial and legal consequences in the event of an accident. So, take the time to evaluate your options and consider your family’s needs for both immediate and long-term security.
