Changes to auto insurance policies ushered in by the Ford government and set to take effect on Canada Day are being met with concern from some advocates who are warning drivers they could face steep financial losses in exchange for meagre savings.
In early 2024, as part of Finance Minister Peter Bethlenfalvy’s spring budget, the government overhauled the province’s auto insurance laws to create more flexibility and choice.
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 will now 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.
The changes, however, have raised concerns that drivers will likely end up underinsured for a catastrophic car crash and could face large out-of-pocket expenses because basic packages will include fewer protections.
Mike Giordano, a board member of the Ontario Trial Lawyers Association, said drivers could be left in a “precarious situation” in the worst-case scenario.
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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,” 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.”
That concern is being echoed by the advocacy group Fair Association of Victims for Accident Insurance Reform, which argues that lower-income Ontarians might choose savings over safety without realizing what they might be giving up.
“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,” said Anthony Grande with the association.
“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 insurance providers, such as the Canadian Automobile Association, have warned drivers to think carefully about their policies.
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“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 government did not make Bethlenfalvy available for an interview, the province said the changes were designed to give drivers more “choice and convenience.”
“The regulatory amendments will allow consumers to choose whether to purchase certain accident benefits beyond core medical, rehabilitation and attendant care coverage,” a recent news release explained.
“This change gives drivers more flexibility to tailor insurance policies to their needs.”
Tom Rakocevic, the NDP’s critic for auto insurance, called the change a “gift” to insurance companies at the expense of drivers.
“These are really just cuts designed as choice,” Rakocevic said. “People during these hard financial times are going to be hard-pressed to try to save a dollar here and there, and that’s all they’re going to save.”
He added, “They’re gonna be giving away crucial benefits if an accident happens.”
Rakocevic said the government should instead have focused on reducing insurance premiums and tackling postal-code discrimination, which slaps drivers with higher premiums based on geography rather than personal driving history.
“Changes to auto insurance policies ushered in by the Ford government and set to take effect on Canada Day…”
Only Colin has to refer to the provincial goverment as being the Ford government.