Major Changes to Ontario Auto Insurance in 2026: Customizing Coverage

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BEN AZIMI /
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Major Changes to Ontario Auto Insurance in 2026: Customizing Coverage

Major Changes to Ontario Auto Insurance in 2026: Customizing Coverage

Ontario is set to introduce a new auto insurance system in 2026 that will allow drivers more flexibility in selecting their coverage. Starting on July 1, 2026, the only automatically included benefits will be for medical, rehabilitation and attendant care. All other benefits, which were previously mandatory, will become optional, enabling drivers to customize their policies based on their individual needs and preferences.

This shift aims to move away from the traditional "one-size-fits-all" approach, giving drivers the ability to choose what additional coverages they want, such as Income Replacement, Non-Earner, Caregiver and House Keeping benefits. These will no longer be included by default, meaning drivers will need to actively opt-in for them.

For instance, if a driver wants to secure financial support in case, they are unable to work after an accident, they will need to add the Income Replacement Benefit (IRB), which provides a weekly payout. If this coverage is not selected, the driver will not receive any income support. Other benefits, like coverage for family members’ travel expenses when visiting an injured person in the hospital, will also become optional.

While the new system may help drivers lower their premiums by excluding unnecessary benefits, there is concern that some may forgo critical protections, leaving them financially exposed in the event of an accident. It’s important to carefully evaluate which coverages are essential and seek advice if needed before making a final decision on insurance options.

Here are some additional tips that drivers should consider with the upcoming changes to Ontario’s auto insurance in 2026:

1. Review Your Current Coverage: Before the new system takes effect, review your current auto insurance policy to understand what benefits are currently included and which ones you might be losing. This will help you make an informed decision about which optional coverages you may want to add in 2026.

2. Evaluate Risk Factors: Consider factors such as how often you drive, your driving habits and the type of vehicle you own. Drivers who spend more time on the road or drive in high-traffic areas may want to opt for additional coverages like enhanced accident benefits or uninsured motorist protection.

3. Look for Discounts and Bundling Options: Many insurers offer discounts for bundling auto insurance with other policies like home insurance. Be sure to explore these options to offset the cost of adding optional coverages.

4. Stay Updated on Policy Changes: Insurance laws and regulations can continue to evolve, so it’s crucial to stay informed about any further adjustments to Ontario’s auto insurance system. This will help you adapt your coverage as needed over time.

5. Consider Long-Term Costs: While choosing fewer benefits can lower your premiums in the short term, it may result in higher out-of-pocket expenses if an accident occurs. Weigh the long-term financial impact of reduced coverage against the immediate savings.

6. Plan for Future Life Changes: Think about how your needs may change over time. If you anticipate changes in your family structure, employment status, or health, adjust your coverage accordingly to ensure you remain protected.

By carefully evaluating your personal needs and understanding the new options available, you can ensure that you have the right balance of coverage at a cost that fits your budget.