Worries mount that Ontario’s auto insurance changes will increase costs

Drivers in Ontario are facing potential financial risks as changes to auto insurance policies, introduced by the Ford government and set to take effect on Canada Day, draw criticism from advocacy groups. These advocates warn that drivers might incur significant costs despite the government's promise of modest savings.

The province's auto insurance laws were overhauled in early 2024, introducing more flexibility and choice. Starting July 1, 2026, while medical and rehabilitation coverage will remain mandatory in the base package, other benefits such as income replacement, personal item coverage, caregiver and housekeeping expenses, and death and funeral benefits will become optional.

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For instance, if they can’t return to work, they’re going to be looking to their own insurance companies to cover income replacement. Right now, they would get that coverage up to $400 per week. If they didn’t opt into that coverage following July 1st, they’ll be left without and they won’t have that financial security.

Concerns are mounting that these changes could leave drivers underinsured in the event of a catastrophic car crash, leading to substantial out-of-pocket expenses. Mike Giordano, a board member of the Ontario Trial Lawyers Association, highlighted the precariousness of the situation. "For instance, if they can’t return to work, they’re going to be looking to their own insurance companies to cover income replacement," he said. "Right now, they would get that coverage up to $400 per week. If they didn’t opt into that coverage following July 1st, they’ll be left without and they won’t have that financial security."

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People who are most vulnerable are probably the people who are looking to save money. And they’re the ones who really can’t afford an accident. Unfortunately, it’s paradoxical. The people who really will need the benefit when a severe accident happens are most likely not to purchase it.

The advocacy group Fair Association of Victims for Accident Insurance Reform echoes this concern, suggesting that lower-income Ontarians may prioritize savings over safety without fully understanding the implications. "People who are most vulnerable are probably the people who are looking to save money. And they’re the ones who really can’t afford an accident," stated Anthony Grande of the association. He added, "Unfortunately, it’s paradoxical. The people who really will need the benefit when a severe accident happens are most likely not to purchase it."

Even the Canadian Automobile Association has cautioned drivers to carefully consider their policy choices. Elliott Silverstein of CAA noted that the potential annual savings per person are likely around $100, a sum he described as "not a significant savings for what you’re getting, but if you run into a situation, the cost could be significant for loved ones." The province maintains that the amendments are designed to offer consumers greater "choice and convenience."

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When you calculate all of it together, you’re probably looking at the range of $100 per person, per year [in savings]. It’s not a significant savings for what you’re getting, but if you run into a situation, the cost could be significant for loved ones.