Lofranco Corriero Blog

Read below our success stories, community engagements and interesting news about Personal Injury law.


Ontario Auto Insurance Changed in 2026 — What Accident Victims Need to Know

Effective July 1, 2026, Ontario's auto insurance system underwent its most significant restructuring in over a decade. The changes affect every driver in the province — but their impact is felt most severely by those who are seriously injured in motor vehicle accidents and discover, too late, that protections they assumed they had no longer exist.

Many Ontario drivers are still unaware of what has changed. This article explains the reform, what it means for accident victims, and what every Ontario driver needs to understand about their coverage.

What Changed — The Short Version

The Ontario government, through the Financial Services Regulatory Authority of Ontario (FSRA), restructured the Statutory Accident Benefits Schedule (SABS) — the framework that governs the no-fault benefits every accident victim is entitled to receive from their own insurer following a motor vehicle collision.

The core change is this: several benefits that were previously mandatory components of every Ontario auto insurance policy are now optional — meaning drivers must actively choose to purchase them, or they will not have them when they need them most.

The government's stated rationale is to give drivers more flexibility and potentially lower premiums by allowing them to avoid paying for coverage they may already have through workplace plans. The reality, viewed from a personal injury lawyer's perspective, is more concerning: the default protection available to seriously injured Ontarians has been reduced, and many drivers will not realize this until they are already in the middle of a serious accident benefits claim.

What Remains Mandatory

Three of the 12 standard accident benefits remain mandatory components of every Ontario auto insurance policy — meaning you have them automatically without any additional purchase required:

  • Medical Benefits — coverage for accident-related treatment that OHIP does not pay for: physician visits, physiotherapy, chiropractic care, psychological counselling, prescription medications, medical devices, and related care.
  • Rehabilitation Benefits — coverage for services aimed at restoring the injured person’s pre-accident level of function, such as occupational therapy, vocational rehabilitation, retraining, and home or vehicle modifications where needed.
  • Attendant Care Benefits — covering personal care assistance (bathing, dressing, mobility) for seriously injured victims. Standard limits: up to $3,000 per month for non-catastrophic injuries, up to $6,000 per month for catastrophic impairments.

Combined limits: Medical and Rehabilitation Benefits share a combined limit of $65,000 for non-catastrophic injuries. For catastrophic impairments, Medical, Rehabilitation, and Attendant Care share a combined lifetime limit of $1,000,000.

These three categories of protection remain in place for every Ontario driver. The remaining nine of the 12 standard accident benefits now require a deliberate decision to purchase.

What Is Now Optional

The nine benefits below — which were previously automatic under every standard Ontario auto policy — are no longer mandated by law under the 2026 framework. How the change reaches you, however, depends on whether your policy is new or renewing:

  • New policies issued on or after July 1, 2026 do not include any of these benefits unless you actively choose to purchase them. The default for a new policy is the leaner mandatory-only coverage — if you do nothing, you have nothing in the nine optional categories.
  • Renewing policies are different. Your existing coverage continues automatically on renewal, including any of the formerly-mandatory benefits you had before. To remove any of them and lower your premium, you (or your broker on your written authorization) must agree in writing to opt out. If your broker is unable to reach you, your policy renews with your current coverage and limits unchanged.

Be aware: switching insurers, letting a policy lapse and re-purchasing, or starting fresh elsewhere may be treated as a new policy — which resets you to the leaner default and means you must opt back into anything you want. The safest practice on every renewal or change of insurer is to read your declarations page carefully and confirm exactly which benefits are listed.

The nine benefits now classified as optional are:

Income Replacement Benefits (IRB)

This is the most significant change for most Ontario drivers. Income Replacement Benefits — which provide 70% of gross pre-accident weekly income, up to $400 per week, when injuries prevent you from working — are no longer automatic.

Under the old system, if you were injured and could not work, income replacement flowed automatically from your own insurer. Under the current system, if you have not purchased this benefit, you have no income replacement from your auto insurance policy — regardless of how serious your injuries are.

Who is most at risk: Self-employed individuals, gig economy workers, freelancers, and anyone whose employer does not provide long-term disability coverage. These individuals now have zero income protection from their auto insurance unless they actively purchase the optional IRB.

Non-Earner Benefits

Non-earner benefits — which pay $185 per week to accident victims who were not employed at the time of the accident (students, stay-at-home parents, retirees) and who suffer a complete inability to carry on a normal life — are now optional.

Caregiver Benefits

Caregiver benefits — payable to primary caregivers of children or dependent adults who can no longer perform their caregiving role due to accident injuries — are now optional for non-catastrophic claimants.

Housekeeping and Home Maintenance Benefits

Benefits covering the cost of hiring someone to perform household tasks the injured person can no longer manage are now optional for non-catastrophic injuries.

Death and Funeral Benefits

In one of the most surprising elements of the reform, even Death and Funeral Benefits — lump-sum amounts payable to surviving spouses and dependants and a contribution toward funeral costs when a covered person is killed in a motor vehicle accident — are now optional. Drivers who do not specifically purchase these benefits leave their families without this coverage in the event of a fatal accident.

Other Optional Benefits

Three additional benefits round out the nine that became optional on July 1, 2026:

  • Lost Educational Expenses — reimbursement for tuition, books and other education-related costs lost when an injured student or trainee cannot continue their program.
  • Expenses of Visitors — coverage for the reasonable travel and accommodation costs of family members visiting an injured person during recovery.
  • Damage to Personal Items — replacement of clothing, eyewear, devices and other personal belongings damaged in the accident.

Individually each of these benefits may seem small, but for some accident victims they fill real financial gaps that workplace plans and OHIP do not cover. Drivers who do not specifically purchase them simply do not have them.

The New "First Payor" Rule

Alongside the optionality changes, the 2026 reform introduced an important shift in how accident benefits interact with workplace health benefits. As of July 1, 2026, auto insurance acts as the "first payor" for medical and rehabilitation costs — meaning your auto insurer pays first for accident-related treatment, before your employer's extended health plan.

The result is that your workplace physiotherapy, chiropractic, and other benefit limits are preserved for non-accident-related health needs throughout the year. This is a genuine benefit for some claimants. However, it adds administrative steps to the claims process, and treatment providers and adjusters must navigate the first-payor framework carefully to avoid delays in approved treatment.

Why This Reform Creates a Significant Coverage Gap

From our perspective as personal injury lawyers who represent accident victims, this reform creates a dangerous coverage gap for many Ontario drivers — particularly those who did not carefully review their policies at renewal and did not realize what they were losing.

Consider a straightforward example: a self-employed contractor is seriously injured in a rear-end collision and cannot work for eight months. His policy renewed under the new framework, but he never received a clear explanation of the changes and simply renewed with the default coverage. His policy does not include the optional Income Replacement Benefit. He has no employer-provided long-term disability insurance. He receives no income replacement from his insurer for the eight months he cannot work.

Under the pre-2026 system, this person would have received up to $400 per week in income replacement automatically — not enough to fully replace his income, but enough to prevent financial catastrophe. Under the current system, with no optional IRB purchased, he receives nothing from his insurer for lost income.

The financial stakes of not understanding these changes are enormous.

What Every Ontario Driver Should Do

Whether your policy is new or renewed under the 2026 framework, review it carefully. For a new policy, the default is now the leaner mandatory-only coverage and any optional benefit you want must have been actively purchased. For a renewal, your existing coverage continues — but if you agreed in writing to decline any benefits during the renewal conversation with your broker, those have been removed. The only way to know exactly what you have is to read your current policy declarations page.

  • Review your current policy declarations page. Confirm whether Income Replacement Benefits, Non-Earner Benefits, Caregiver Benefits, and Housekeeping Benefits are listed as part of your coverage.
  • Audit your workplace benefits. If you have employer-provided long-term disability coverage, review it carefully. Does it specifically cover motor vehicle accidents? What are the elimination period and benefit limits? Does it continue if you leave that employer?
  • If you are self-employed, a gig worker, or have no workplace LTD — ensure you have purchased the optional Income Replacement Benefit. The cost difference between a minimum policy and an IRB-inclusive policy is often surprisingly small relative to the protection it provides.
  • Consider whether Caregiver Benefits apply to your situation. If you are a primary caregiver for children or a dependent adult, the optional Caregiver Benefit may be essential to your family's financial stability after a serious accident.
  • Speak to your insurance broker about the 2026 changes. Ask specifically what optional benefits you have, what was removed from your standard coverage, and what it costs to add protections back.

You can change your optional benefit selections at any time during the policy — not only at renewal. If your circumstances change — a new job, a new child, becoming self-employed, or a family member moving in as a dependant — contact your insurer or broker to update your coverage. Important: only the coverage that is actually in place at the time of an accident applies to your claim, so do not delay these changes.

What If You Were Injured Before July 1, 2026?

If you were injured in a motor vehicle accident before July 1, 2026, the pre-reform SABS rules continue to govern your claim in full. The 2026 reform is not retroactive.

Benefits that were mandatory under the pre-reform regime — including Income Replacement Benefits — remain available to you based on your policy's terms at the time of your accident. Your ongoing entitlement to IRB, attendant care, and all other pre-reform benefits continues under the pre-reform rules.

If your insurer is attempting to apply post-reform rules to a pre-reform accident, or if your benefits have been denied or terminated, contact a personal injury lawyer immediately.

The Impact on Tort Claims

The 2026 SABS reforms did not change the tort system. The ability to sue the at-fault driver for pain and suffering, lost income, and future care costs remains fully intact. However, the reduction in mandatory no-fault accident benefits places greater pressure on tort claims to compensate for income loss and other expenses that accident benefits previously covered automatically.

As benefits become thinner and the financial gap between accident benefits coverage and actual losses grows wider, a well-managed tort claim becomes the primary financial lifeline for seriously injured Ontario accident victims. This makes experienced personal injury representation more important than ever.

We Are Here to Help

At Lofranco Corriero, we have been representing accident victims through every major Ontario insurance reform for over 35 years — from the 1994 changes to the 2010 reforms to the 2016 updates, and now the 2026 restructuring. These are among the most consequential changes we have seen, because they shift financial risk from insurers to drivers in ways that many people do not understand until they are in the middle of a serious claim.

If you have been injured in a motor vehicle accident — whether before or after July 1, 2026 — we are here to help you understand your rights, navigate the claims process, and maximize every dollar of compensation available to you.

Call us at 1-866-LOFRANCO for a free consultation. Book online →

The information in this article is provided for general informational purposes only and does not constitute legal or insurance advice. Benefit amounts, mandatory/optional classifications, and regulatory details referenced are based on FSRA guidance as of the date of publication and are subject to change. Please consult a licensed insurance broker regarding your specific policy and contact Lofranco Corriero for legal advice about your accident benefits claim.



CONTACT FORM

All Articles