15 minutes to explain a benefit that would save your client 8 cents. Is auto optionality worth it?

Soon to be a reality in six months, optionality in the Ontario auto insurance product will only end up saving consumers about $100 a year at most, Insurance Brokers Association of Ontario (IBAO) CEO Colin Simpson told a panel discussion at last year’s IBAOcon.

Most mandatory accident benefits under the province’s Statutory Accident Benefits Schedule will become optional on July 1, 2026, save for medical/rehabilitation and attendant care benefits. Proposed optional benefits for next year include income replacement benefits (IRB), non-earner benefits, caregiver expenses, and death and funeral benefits, among others.

Ontario’s brokers have done the math. Their research shows a consumer can save a maximum of $75 a year by opting out of IRB and $12 a year by opting out of non-earner benefits. Those are the two largest savings.

For consumers, projected cost savings from other proposed optional benefits, such as dependent care and death benefits, will amount to just pennies a year, Simpson added.

“The overall assumption…is that 80% of all consumers will buy all the options,” Simpson says. “So, we’re talking about optionality for 20% of the market.”

IBAOcon panellist Rick Orr, owner of the brokerage Orr Insurance & Investment, doubted the additional time brokers spend explaining the new optional benefits to consumers — including a check to see if clients have coverage through other plans — will pay dividends.

“Really, you’re going to have a conversation with a client and spend 10 or 20 minutes explaining all the options, and [asking]: ‘Does your benefit plan cover you for death benefit? Do you have this coverage, or that coverage?’” Orr says during a panel discussion. “And at the end of that conversation, you’re saying, ‘Oh, by the way, the death benefit is eight cents.’

“Imagine how [ticked] off your client’s going to be.”

Reform rigmarole

For Ontario’s auto insurance industry, moving to optionality was not easy, said Michelle Dodokin, head of auto insurance supervision with the Financial Services Regulatory Authority of Ontario.

“At the beginning of [2025], it was really challenging,” Dodokin said. “There was a lot of concern from the industry, both from insurers and also from brokers, [about whether] we were actually going to be able to land reforms for July 1, 2026.

“Ten months later, that picture has changed very significantly, and the main reason for that is industry collaboration.”

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To comply with the reforms, Ontario auto insurers have filed new rates for the new product. Dodokin reported the regulator has tried to facilitate insurers’ filing processes via fast-track procedures.

“We’ve developed some cost benchmarks for insurers to use as they’re preparing their filing[s],” she says. “And if insurers adopt those cost benchmarks, essentially it streamlines the filing processes so we can give them fast approvals…”

About 60 insurers write auto in Ontario, Simpson noted. Each has an average of five rates that need to be re-filed.

For Elliott Silverstein, director of government relations at CAA Insurance, “the sky won’t fall on July 1, 2026.” However, it’s uncertain how optionality will ultimately roll out.

“I think that, as people start learning about the options that are out there, they’re going to start asking questions,” Silverstein says. “One year from now, it may be a different conversation.”

Lengthy discussions

Some brokerages are already staffing up to prepare for the change, said Mark Abraham, CEO at Registered Insurance Brokers of Ontario, the province’s broker regulator.

“Especially if you’re in a call centre-type environment, it may scale quite linearly. A 10-minute conversation is now a 15-minute conversation because you’ve got to have discussions [about] the different options,” Abraham says.

That doesn’t mean every brokerage will need to add staff. “But do think about what those [impacts] are going to be,” Abraham advised. “How are you going to handle this change? What are the operational impacts that it may have on the business?”

Insurers can offer each individual optional coverage separately. Or they can offer a bundled package of optional coverages, Dodokin said. And insurers can decide how to assemble the bundles, although the regulator will be watching.

“From our perspective, the bundles have to make sense,” Dodokin said. “It does kind of make sense for those smaller coverages to be bundled together, because you’re not going to sell coverage for 50 cents or $1…”

Orr said he would like to see a bundle “that gives you everything you had before.” Then brokers can spend their time talking about big-ticket items like income replacement benefits.

Also, insurers can potentially offer discount bundles.

However, brokers pointed out, consumers may have to agree to the entire bundle if they want to receive the discount, even if the bundle includes coverage options the consumer may not want.  

“We don’t know who’s going to come up with what bundles [or] what consumers are going to want,” Orr says.

A lot about the reforms remains up in the air, he said.

This article is excerpted from one that appeared in the December 2025-January 2026 print edition of Canadian Underwriter.