Ontario auto insurance changes from July 1, 2026: which accident benefits are now optional

For Ontario auto policies issued or renewed on or after 1 July 2026, only medical, rehabilitation and attendant care benefits remain mandatory accident benefits. Most other benefits that used to come automatically with every policy, including income replacement, became optional: you choose whether to buy them. Most drivers meet the change at their first renewal after 1 July 2026, so a renewal arriving now may ask you to confirm benefits you never had to think about before. The right answer depends mainly on whether you would have other income if a crash kept you off work.

This guide explains what changed, what stays the same and how to decide. Check FSRA's consumer pages for the full official list of optional benefits and the wording your insurer must use.

What the Statutory Accident Benefits Schedule does

Ontario accident benefits are paid by your own insurer if you are injured in a car accident, regardless of who caused it. They sit alongside the right to sue an at-fault driver, which is limited for pain and suffering and certain other losses. Benefits are set out in the Statutory Accident Benefits Schedule (SABS), a regulation under the Insurance Act, and are supervised by the Financial Services Regulatory Authority of Ontario (FSRA). Disputes over benefits go to the Licence Appeal Tribunal.

Mandatory and optional since 1 July 2026

The standard limit for medical, rehabilitation and attendant care for non-catastrophic injuries has been $65,000 combined, with $3,500 for injuries under the Minor Injury Guideline (sprains, strains, whiplash and similar) and $1,000,000 combined for catastrophic impairment. Optional increases to these limits remain available from insurers. Confirm current limits on FSRA's site, because the schedule can be amended.

Under the new rules, auto insurance becomes the first payer for accident-related medical and rehabilitation benefits (medication costs excepted), rather than paying only after a workplace or extended health plan. Newly optional benefits, if bought, generally cover the named insured, their spouse, dependants and listed drivers. Ask your insurer how this applies to your policy.

The decision: which optional benefits to keep

Work through these questions for each person the policy covers (you, your spouse, dependants who live with you):

1. If an injury stopped you working for six months, what income would you have? Look at your employer's short-term and long-term disability plan: the waiting period, the percentage of salary, whether it covers motor vehicle accidents, and whether it ends if you leave the job. Employment Insurance sickness benefits are limited in length and amount; check Canada.ca for the current rules.
2. Are you self-employed, a contractor or a gig worker? You are usually the person with the most to lose by dropping income replacement.
3. Does anyone depend on you for care at home? Consider the caregiver benefit.
4. Could you pay for housekeeping and snow clearing if you could not do it? Consider housekeeping and home maintenance.
5. Are there students or non-earners in the household? Consider the non-earner and educational benefits.
6. Does a life insurance policy cover your family? That affects how much the death benefit matters.

Worked example (illustrative)

Priya, 38, is a salaried employee earning $1,150 a week gross. Before July 2026, her policy included standard income replacement: 70% of gross weekly income up to $400 a week. Her employer plan pays 66.7% of salary after a 17-week waiting period for long-term disability, and short-term disability pays from the first week.

• Her group short-term plan covers the early months. Her long-term plan covers the long term. She already pays for both through work.
• Her insurer quotes an optional income replacement benefit at a cost she can compare against the risk. Suppose it is $55 a year (illustrative) for the standard $400 a week.
• If she were off work for 26 weeks and her group coverage did not apply to the accident, 26 x $400 = $10,400 of benefit would be at stake against a $55 premium.

Priya's decision turns on one fact: whether her group plans cover a car accident and how they coordinate with auto benefits. She checks her benefits booklet before deciding.

Now Marc, 44, a self-employed electrician with no disability insurance. For him income replacement is the main protection if a crash keeps him off the tools. He should consider not only keeping the standard benefit but also asking for the optional higher weekly limit, if his income justifies it.

What has not changed

• Third-party liability (minimum $200,000; most drivers buy $1 million or $2 million).
• Uninsured automobile coverage.
• Direct compensation property damage (DCPD), which drivers have been able to opt out of since 1 January 2024.
• Optional coverages such as collision, comprehensive and the OPCF endorsements (for example OPCF 20, 27, 43, 44R). See the discounts and endorsements guide.
• Your right to sue an at-fault driver within the limits of the Insurance Act.

How to handle your first renewal under the new rules

1. Read the renewal and any FSRA-required notice about accident benefit choices.
2. Ask for the price of each optional benefit separately.
3. Check workplace benefits for everyone in the household.
4. Write down what you keep and why, and keep the insurer's confirmation.
5. Compare quotes from other insurers with the same benefit choices, or the comparison is meaningless. The renewal checklist and the worked comparison show how.

When to consult a professional

If you have a disability, an existing claim, dependants with special needs, or irregular self-employed income, ask a licensed broker to explain your options and, if you are already injured, speak to a lawyer or licensed paralegal who practises accident benefits.

Frequently asked questions

Do the changes affect a policy renewed in May 2026?

The new rules apply to policies issued or renewed on or after 1 July 2026. A policy renewed before that keeps its existing benefits until its next renewal. Check your policy dates.

If I decline income replacement, can I add it later?

Usually you can ask to change optional benefits during the term, but the change only applies from the date it is made, not to an accident that has already happened. Ask your insurer how and when a change takes effect.

Do optional benefits cover passengers and pedestrians?

Accident benefits generally follow the person and the policy that applies to them. Who pays, and which choices apply, depends on the policies in the household and the vehicle involved. Ask your insurer to explain how your choices affect family members.

Is the death and funeral benefit still included?

Not automatically. Since 1 July 2026 death and funeral benefits are among the optional benefits, so they apply only if you choose them. Check your renewal documents to see which optional benefits your insurer has applied.

More guides

• Car insurance by province: overview
• What determines your car insurance rate
• Alberta and the care-first model, the other big injury-benefit reform under way

Sources

• FSRA — auto insurance consumer information and accident benefit changes
• Ontario e-Laws — Statutory Accident Benefits Schedule and the Insurance Act
• Tribunals Ontario — Licence Appeal Tribunal for accident benefit disputes
• Canada.ca — Employment Insurance sickness benefits