Ontario auto insurance gets a redesign July 1

Ontario is overhauling mandatory accident benefits on July 1, giving drivers more flexibility over what they pay for — but at the cost of some coverage.

Previously, income replacement, lost educational expenses, death benefits, and funeral expenses were automatically included. Starting Monday, those become optional. The mandatory benefits shrink to medical care, rehabilitation, and attendant care only.

Lance Miller, insurance broker and CEO of Surex Insurance, says the average customer can save $100-200 annually by opting for basic coverage. But he cautions that the savings may not justify the risk. "If you opt out of funeral expenses, maybe that is going to be a $30-50 charge annually," Miller said. "But if there's a funeral, those cost tens of thousands of dollars."

The shift also affects non-drivers. Before July 1, any pedestrian, passenger, or cyclist hit by a car was entitled to the same no-fault benefits regardless of who was driving. Now, only the driver, the driver's spouse, and their dependents are covered under optional benefits. If drivers lend their vehicle to someone not on their policy, that person only gets the mandatory minimum — not any optional coverage the owner purchased.

For existing policies, coverage stays unchanged. The July 1 change applies only to new or updated policies. The province directed insurance brokers to contact customers about adjusting their coverage. The change stems from a 2022 auditor general report that found Ontarians paid the highest auto insurance rates in the country — a promise to fix it featured prominently in Doug Ford's 2022 election campaign.