Ontario Auto Insurance Changes July 1, 2026: What You Need to Know 

Major changes to auto insurance take effect in Ontario on July 1, 2026, and they affect everyone, whether you own a car or not. 

Benefits that were once automatically included in every policy, protections available to anyone injured in a car accident, regardless of fault, are being scaled back. 

Here’s a breakdown of what is changing, who it affects and what you can do about it. 

What Is Actually Changing? 

Right now, when you buy auto insurance in Ontario, certain protections are automatically included. Think of them as a safety net that kicks in if you are hurt in a car accident, regardless of who caused it. 

Starting July 1, that safety net will get much thinner. 

Benefits that were once automatically included in every Ontario auto insurance policy are becoming optional and will be available only if you pay extra for them. Here is a breakdown of what is moving to optional coverage: 

• Income replacement benefits: If you are injured in a car accident and cannot return to work, you are currently entitled to $400 per week. After July 1, this will only be available if you have added it to your policy. 

• Caregiver benefits: If an injury leaves you unable to care for a child or family member, caregiver benefits help cover the cost of that gap. These will no longer be automatic. 

• Non-earner benefits: Students, stay-at-home parents, and others who are not formally employed are currently protected if they are hurt in an accident. That protection becomes optional under the new rules. 

• Death and funeral benefits: Families who lose a loved one in a collision will no longer automatically receive financial support to help cover funeral costs. 

• Visiting expenses: If a family member is seriously injured and hospitalized far from home, travel and accommodation costs for visiting loved ones were previously covered. They will no longer be included by default. 

If you already have auto insurance, your policy will be deemed to remain unchanged after July 1 unless and until you choose to reduce your benefit coverage. If you are renewing your policy or buying insurance for the first time, it would be wise to maintain your coverage and/or purchase optional benefits to protect yourself from the consequences of a serious accident. 

People who do not have access to an auto insurance policy of their own will qualify only for the standard new benefit coverage: medical, rehabilitation and attendant-care benefits. 

Who Is Most at Risk? 

Some people will feel the impact of these changes more than others: 

• People without their own auto insurance: About 40 per cent of accident victims do not have their own auto policy. If you are a passenger, pedestrian or cyclist who gets hurt, you may be left with only the bare minimum coverage. 

• Non-driving households: If nobody in your home owns a car or holds an auto insurance policy, you have no access to the optional benefits at all. 

• People who can’t afford to miss work: The income replacement benefit is $400 a week, which has not changed in decades. For many people, that is already not enough. After July 1, even that small amount will be available only if you pay extra for it. 

• Caregivers and students: If you are not formally employed but you contribute to your household by caring for children or family members, the benefits that recognized that role are going away unless you opt in. 

• Families dealing with serious injuries: Visiting a family member during a long hospital stay can cost tens of thousands of dollars in travel, accommodation and time off work. Those expenses used to be covered. Now they may not be. 

What Happens If You Don’t Have These Benefits and You Get Hurt? 

In short, you will likely have to go to court to recover any money. 

Ontario’s auto insurance system was built on a “no-fault” model: If you are hurt in an accident, you get support quickly through your own insurance, no matter who was to blame. It was designed to be fast and accessible. 

Without those benefits, the only way to recover financially is to sue the person who caused the accident. That process is: 

• Slow, often taking years to resolve 

• Stressful and uncertain 

• Limited by law to people with permanent and serious injuries, or with income losses 

• Expensive 

• Not available at all if you were at fault in the accident 

The result is that more injured Ontarians will end up in court, legal backlogs will grow, and people will wait much longer to get the financial help they need. 

What About Your Insurance Broker? 

Your insurance broker is supposed to help you understand your coverage and make sure it fits your life. After July 1, that responsibility becomes even more important. 

If a broker does not explain the new optional benefits, does not ask about your situation, or simply sells you the cheapest policy without walking you through what you could be missing, they may not be doing their job properly. 

If you later find yourself without coverage you needed and were never told about, you may have grounds for a complaint or legal claim against your broker. 

The bottom line: Do not assume your broker has taken care of everything. Ask directly. 

Questions worth asking your broker: 

• Which benefits are now optional on my policy? 

• What optional benefits are currently available to me? 

• What other optional benefits are available and what would it cost to add them? 

• Can you put our conversation and any decisions in writing? 

A New Wrinkle: Car Insurance and Your Work Benefits 

Under the new rules, your auto insurance becomes the first payer if you are hurt in an accident (other than for medications) even if you have group health benefits through your employer. Previously, your group health benefits paid first. 

Your workplace benefits can then top up anything your auto insurance does not cover. That sounds straightforward, but it can get complicated quickly in serious cases. If you use up your auto insurance coverage and then rely on your work benefits, but your injury is later classified as catastrophic, which unlocks more auto insurance money, no one is yet sure how to sort out who owes what to whom. 

The government has not given clear guidance on this yet, which means confusion and disputes are likely. 

What You Should Do 

You still have time to act. Here is a simple checklist: 

• Call or email your broker and ask them to walk you through what is changing in your policy. 

• Opt in to optional benefits, including income replacement, visitors’ expenses and enhanced medical coverage, if needed. 

• Increase your liability coverage to more than $2 million. If someone sues you after an accident, you will want that protection. This coverage also protects your family if you are injured by someone with inadequate insurance. 

• Get everything in writing so there is a record of what you were told and what you chose 

• If you do not have auto insurance, speak with a broker about what options are available to you under the new rules. There may be none, but you may be able to protect yourself by buying other insurance, such as short- or long-term disability coverage. 

Frequently Asked Questions 

Do these changes affect me if I already have car insurance? 

Not yet. Your existing policy will automatically carry forward coverage comparable to what you currently have. At renewal, make sure you opt in to these benefits and any other optional benefits that would help you and your family. 

What if I cannot afford to add optional benefits?  

That is a real concern for many Ontarians. The honest answer is that going without them is a significant risk. If cost is a barrier, ask your broker about the most important ones to prioritize, such as income replacement, and what the minimum added cost would be. 

What if I do not own a car or have car insurance?  

Under the new rules, you will have access only to the most basic accident benefits if you are hurt in a collision. You will not be able to opt in to optional benefits because they are tied to holding a policy. This is one of the biggest gaps in the new system. You can buy other insurance to try to fill the gap, such as short- or long-term disability coverage. 

If I get hurt in an accident, can I just sue instead of using my benefits?  

You can pursue a lawsuit if someone else was at fault, but it takes much longer than accessing benefits directly. You also cannot recover through a lawsuit the same benefits you would have received through your insurance. The two streams are separate. And if you were at fault, you likely cannot sue at all. There are also legal restrictions on lawsuits, including a requirement to have a permanent and serious injury or an income loss. 

What is the $400-a-week income replacement benefit? 

It is a weekly payment available through your car insurance if you cannot work because of injuries from an accident. It has not increased in decades and does not come close to replacing most people’s actual income. After July 1, it will only be available if you paid to add it to your policy. 

What should I do if I think my broker did not explain these changes properly?  

Start by documenting what you were — and were not — told. If you later find yourself without the coverage you needed, speak with a personal injury lawyer about your options. Broker-negligence claims are expected to become more common after July 1. 

Why is there going to be more lawsuits after July 1?  

People who would previously have accessed financial support quickly through their insurance will now have no choice but to go through the courts to get help. More people without benefits means more people suing, which means longer waits for everyone in the legal system. 

Is the government going to fix the $400 per week benefit amount?  

There are no announced plans to update that amount for inflation. The figure has remained the same for decades while the cost of living has risen significantly. You can, however, buy more income-replacement coverage if you wish.