The Ford government’s changes to auto insurance will leave drivers in Ontario with a “significant” choice in the new year, but one that advocates argue could leave some with less protection in the worst-case scenario.
In early 2024, as part of Finance Minister Peter Bethlenfalvy’s spring budget, the government overhauled the province’s auto insurance laws and claimed the changes would give drivers “affordable options” and “create a more modern system.”
While insurance companies will be required to provide medical and rehabilitation coverage as part of the base package, all other benefits will be optional as of July 1, 2026.
Drivers who are switching or starting a new insurance policy would be offered a suite of benefits they could tap into, including: income replacement, expenses for damage to personal items, caregiver and housekeeping expenses, and death and funeral benefits.
“This is probably the biggest change we’ve seen in the auto insurance system in at least a decade,” said Elliott Silverstein with the Canadian Automobile Association.
The changes, however, have raised new concerns that drivers will likely end up underinsured for a catastrophic car crash and could likely face large out-of-pocket expenses.
“The big change here is we’ve enjoyed all these benefits inside our insurance policies up until today, so we already have this in our system now,” Silverstein said of the impending changes.
“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.”
While the Ford government has presented the change as an affordability measure, the policy is facing scrutiny over whether insurance premiums will be driven down.
Steven Rastin, senior counsel at Gluckstein Lawyers, argues that insurance companies might be able to charge higher monthly fees for “a la carte” upgrades.
“It should be noted that the core price of auto insurance is subject to regulation, but insurers are allowed to set the price of optional benefits,” Rastin said.
“It seems unlikely that those drivers who are having a difficult time making ends meet will be inclined to pay an extra $20, $30 or $50 a month for benefit options.”
When the measure was first introduced in 2024, Bethlenfalvy said the move would “allow for consumers to have more convenience and choice” in how they pay for the vehicle insurance but suggested the reforms wouldn’t necessarily lower auto insurance rates.
“I don’t think this is where we have any sort of specific numbers in terms of the rate of increase or a decrease,” Bethlenfalvy said at the time.
Tom Rakocevic, the NDP’s auto insurance critic, said the government is asking drivers to “give away their benefits” in exchange for little benefit.
Rakocevic called on the government to “go back to the drawing board” and find a new path to reducing auto insurance premiums.
The CAA, meanwhile, is calling on drivers to stick with their existing plans.
“These decisions you’re making are going to be things you draw upon when you least expect, but need it the most,” Silverstein said.
“If you are happy with your insurance policy today, there is no need to change your policy as of July 1.”