Starting July 1, 2026, Ontario is fundamentally overhauling its auto insurance system by shifting from a "standard bundle" to a modular "build-your-own" model. Here, we share some of the insights to help you understand what this change means:
Historically, Ontario’s Statutory Accident Benefits Schedule (SABS) provided a mandatory "one-size-fits-all" safety net. Starting July 1, 2026, this changes. Only the most vital medical and rehabilitation supports remain mandatory. All other financial supports move to an "opt-in" basis.
Important Protection: For existing drivers, your policy will automatically renew with your current benefits intact. You only lose coverage if you proactively opt out in writing. However, for new policies issued after July 2026, you will receive only the "skeleton" coverage unless you specifically add the optional benefits.
To ensure basic survival and recovery, the Ontario government has kept a small group of benefits mandatory. You cannot opt out of these:
Medical & Rehabilitation Benefits: Covers physiotherapy, counseling, and medical equipment.
Attendant Care Benefits: Pays for personal support workers if you cannot bathe, dress, or feed yourself.
The "First Payer" Rule (New for 2026): In a major win for drivers, auto insurance now becomes the primary payer for medical/rehab. Previously, you had to exhaust your workplace benefits first. Now, your auto insurer pays upfront, preserving your work benefits for regular use.
Many benefits that Toronto drivers take for granted will now be optional. If you do not actively select them, you receive $0 for these categories:
| Benefit Type | What It Covers | Why Toronto Drivers Need It |
|---|---|---|
| Income Replacement | Provides up to $400 per week (standard) to compensate for lost wages if you are unable to work due to injury. | Especially important for the 20% of Torontonians who are self-employed or gig workers without employer benefits. |
| Non-Earner Benefit | Offers $185 per week for individuals not currently employed, such as students or retirees. | Essential for students at institutions like UofT or York who may face extended recovery periods. |
| Caregiver Benefit | Covers the cost of hiring someone to care for dependents if you are unable to do so. | Critical support for stay-at-home parents, particularly in high-traffic urban areas. |
| Housekeeping | Pays for professional cleaning and home maintenance services while you recover. | Available for all injury types if purchased, not limited to catastrophic claims. |
| Death & Funeral | Provides lump-sum payments to families along with coverage for funeral expenses. | Acts as a financial safety net for families who depend on the primary breadwinner. |
One of the most significant—and often overlooked—changes involves third parties.
The Old Way: If you hit a pedestrian, they could access your full suite of benefits (like Income Replacement).
The 2026 Way: Optional benefits now only apply to the named insured, their spouse, and dependents.
The Impact: A pedestrian or cyclist hit in downtown Toronto may only have access to your mandatory medical benefits. To recover lost wages, they will now be forced to sue you in court (Tort claim), likely increasing the number of lawsuits in the city.
Supporters argue this will lower premiums by roughly 5% to 10% for those who opt out of everything. However, critics warn of "underinsurance."
Check Your "Collateral" Benefits: Does your workplace disability plan pay at least 70% of your salary? If yes, you might safely opt out of the auto Income Replacement benefit.
Evaluate Your Household: Do you have children or elderly parents? If you are injured and can't care for them, the Caregiver Benefit (now an optional add-on) becomes your most valuable asset.
Review the OPCF 47R: This is the new form insurers must provide. It clearly lists your choices. Do not sign it until you’ve cross-referenced it with your private health insurance.
Moving to a "choose-your-own" model puts the power—and the risk—directly in your hands. In a high-risk driving environment like Toronto, "cheaper" can often become much more expensive in the event of a crash.
At Begin Insurance, we act as your expert guide through the 2026 changes and make sure you understand exactly what you are keeping and what you are letting go.
We make it easy to manage your auto insurance in Toronto through our tailored insurance broker services. We compare the coverages provided by the top insurers in Toronto and help you select the best coverage based on your driving habits, budget, location and requirements. Request a free quote to learn about cheap auto insurance in Toronto.
Posted May 29, 2025