Opinion | Why Ontario pedestrians without auto insurance will need access to optional benefits  

I am approaching 40 years dealing with automobile insurance disputes. During my first 30 years, there was little innovation in the delivery of auto insurance. Thankfully, this last decade has seen changes that are helping consumers.  

These innovations include electronic pink slips to let consumers demonstrate they have insurance coverage simply by opening an app on their phones. It also includes pay-as-you-go insurance models, which charge consumers by the kilometer and financially benefits those who do not operate their vehicles regularly. 

Another significant innovation allows individuals who operate their automobiles as rideshare vehicles or food delivery vehicles to do so without having to take out a commercial automobile insurance policy. They can, instead, obtain an endorsement to allow them to use their personal vehicles for these commercial purposes.

When rideshare services emerged in Ontario, my first reaction was that it represented a policy breach of the standard automobile insurance policy, which precludes driving for commercial hire. The rideshare endorsement cleans up that problem efficiently. 

The Financial Services Regulatory Agency of Ontario (FSRA) has done a good job of modernizing the insurance product to allow for these innovations.  

And a coming change highlights the need for FSRA to again act quickly on a needed innovation.  

Ontario reform concerns

On July 1, 2026, Ontario will move to an ‘a la carte’ model for the delivery of accident benefits. This means that if clients do not obtain optional coverage, they will find themselves with far less no-fault automobile insurance benefit availability than they have had for the last 35 years. Without purchasing optional coverage to replace your income when they are disabled following a car accident, there will be no such coverage available to them.

That means someone who is injured and is unable to work will have no coverage to replace their income. Currently that coverage is $400 a week. As of July 1, 2026, it will be zero dollars without the purchase of optional benefits. Similarly, housekeeping benefits, visitor expenses, replacement of damaged clothing, and even death and funeral benefits, will all cease to be automatically part of the automobile insurance policy without having purchased the optional benefits. 

Those who have automobile insurance policies will need to be educated about these changes by their insurers or their insurance brokers. They will have the ability to decide for themselves whether it is worth their while to purchase these optional coverages.

Change demands innovation

Where innovation is needed lies in the fact that a growing percentage of Ontarians do not have automobile insurance policies.

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Many individuals, especially those living in urban centres, rely on rideshare services. Recent studies have shown the popularity of rideshare services continues to grow, with benefits to both the environment and to those who wish to join the gig economy. Other individuals have decided they can rely on public transit rather than go to expense of owning and operating a vehicle. Still others ride their bikes or may have the benefit of a vehicle supplied to them by an employer.

With the optional benefits only made available to those individuals named specifically on the insurance policy, being a passenger in such a vehicle or even being struck as a pedestrian by such a vehicle will not garner those optional coverages for them. No rideshare passenger will get these coverages. Further, unless an employer purchases this coverage for its fleet for employees who are named on policies, those individuals will also be deprived of this coverage.

Effectively, no one will get the optional benefit coverage unless they are specifically named on an automobile insurance policy that has purchased those options. 

New coverage needed

To rectify this oversight, consumers in Ontario should be able to purchase these optional coverages for themselves, even if they do not have a car. Making this possible represents a critical innovation required at this time.  

Insurers should be more than happy to sell coverage to individuals who do not own vehicles in the form of a stand-alone, optional accident benefit insurance policy. The cost of such insurance would be nominal (these options have traditionally been priced in the $100 to $300 range per annum).

Consumers would be well-advised to make the purchase. The province would benefit from encouraging such a step, since the failure to have access to weekly income replacement benefits will lead to more claims for Ontario Disability Support Plan (ODSP) payments, which are a drain on the public purse that all citizens have to fund. 

Related: Why Ontario’s shift to optionality may force e-bike riders to sue

Optional benefits existed before July 1, 2026. It is already possible to increase one’s coverage for medical and rehabilitation benefits from the standard $65,000 of coverage over five years to $1 million in coverage for life, for a ridiculously modest sum of money. Yet very few consumers have taken advantage of this option, to their own personal detriment. It also harms society as a whole, because OHIP and other social services must step in when medical and rehabilitation supports under the automobile insurance regime run out.

Those who do not have insurance policies of their own could not then, and still cannot now, buy those optional policies. The reason for this is that the insurance product does not yet exist.

Who is going to be the first insurer to innovate and strive to create such a product? Brokers and consumers need to advocate for its creation. And FSRA needs to authorize it.  

Eric K. Grossman is a founding partner at Zarek Taylor Grossman Hanrahan LLP.