Auto Insurance Rules Changed in Ontario, Drivers’ Safety Concerns Rise

Auto insurance reforms introduced by the Ford government in Ontario could become a major decision point for drivers starting next year. While the government describes the changes as offering “choice and convenience,” experts warn the new system may expose motorists to serious financial risks in the future.

The reforms were announced in the 2024 spring budget by Finance Minister Peter Bethlenfalvy. Under the new rules, beginning July 1, 2026, only medical and rehabilitation coverage will remain mandatory. All other benefits will become optional.

This means drivers will have to decide whether to purchase coverage such as income replacement, caregiver expenses, housekeeping support, damage to personal belongings, and death and funeral benefits — or go without them.

According to Canadian Automobile Association expert Elliott Silverstein, this is the most significant overhaul of Ontario’s auto insurance system in more than a decade. He noted that even if drivers opt out of several benefits, annual savings may amount to roughly $100 per person. However, in the event of a serious collision, families could face substantial out-of-pocket costs.

Legal expert Steven Rastin cautioned that insurers may charge higher monthly fees for optional benefits, as pricing for add-ons is not strictly regulated. For drivers already struggling financially, paying an additional $20 to $50 per month may not be realistic.

Opposition NDP auto insurance critic Tom Rakocevic accused the government of asking drivers to surrender vital protections in exchange for minimal savings. He warned that within a few years, motorists could end up paying similar premiums as they do now, but with significantly reduced coverage.

While the government insists the reforms will give consumers greater flexibility, it has also acknowledged there is no guarantee that insurance premiums will decrease.

The CAA has advised drivers to carefully consider their options and suggested that those satisfied with their current coverage should avoid making changes after July 1, 2026, emphasizing that insurance is often needed most when it is least expected.