Key Updates to Ontario’s Accident Benefits System Effective July 1, 2026

Starting July 1, 2026, Ontario will implement one of the most significant modifications to its automobile insurance accident benefits regime in recent history. The amendments, introduced through Regulation 383/24, will fundamentally alter the structure of benefits available under the Statutory Accident Benefits Schedule (SABS).

What Are the Major Changes?

The most notable shift is that many benefits, which are currently automatic and included in every policy, will now be optional. Specifically:

• The benefits initially remaining mandatory: medical, rehabilitation, and attendant care benefits. These continue to be core protections in all policies.
• The benefits that will become optional: income replacement, non-earner benefits, caregiver benefits, housekeeping and home maintenance expenses, lost educational expenses, visitor expenses, damage to personal items, funeral, and death benefits.

Who Can Access Optional Benefits?

The eligibility for optional benefits will be more restricted. Only the following individuals will be able to access these benefits if they actively qualify and choose to purchase:

• The named insured on the policy.
• Their spouse and dependants, including spouse’s dependants.
• Any drivers specifically listed on the policy.

This limits access to many people who previously could claim benefits—such as pedestrians, cyclists, or passengers without their own policies or not listed as drivers—unless their insurance coverage explicitly includes these optional benefits.

“First Payer” Role for Insurers

A positive development is that auto insurers will now become the primary payer for the mandatory medical, rehabilitation, and attendant care benefits. This change eliminates the previous requirement for claimants to exhaust other benefits first, such as workplace or private health plan coverage, streamlining the process and reducing delays.

Why These Changes Are Important

While the modifications allow for more flexible and potentially lower premiums, they also introduce significant risks:

• Many insureds will need to actively select the optional benefits they want, and failing to do so could leave them vulnerable in the event of an accident.
• Uninsured or underinsured populations, such as pedestrians, cyclists, or individuals without their own policies, may face reduced coverage, increasing reliance on tort claims and possibly increasing claims costs for insurers.
• There could be a rise in tort litigation, as victims lacking comprehensive benefits will need to seek compensation through the court system, which can be slower, more costly, and uncertain.
• The public purse could be strained as more injured individuals rely on social assistance programs like EI, OW, or ODSP if they cannot claim adequate benefits through insurance.

These amendments signal a pivotal shift in Ontario automobile insurance. The benefits once embedded in every policy will now require explicit opt-in participation by insureds. Motorists, pedestrians, cyclists, and passengers alike need to carefully review their coverage options ahead of July 2026. Consulting with your insurance broker and understanding the necessary coverages are more critical than ever to ensure adequate protection.

Flaherty McCarthy LLP will continue to monitor these developments to provide clients with timely advice and effective strategies in litigation and claims management related to these policy changes. 

Summary Chart of the Changes