Optionality could leave passengers, even children, without auto coverage

With just months until Ontario auto insurance optionality comes into effect, industry sources continue to raise concerns about the impact on consumers, including passengers and pedestrians.

On July 1, 2026, most accident benefits except for medical/rehabilitation and attendant care benefits will become optional. This means consumers will need to opt in to coverages like income replacement benefits, non-earner benefits, caregiver expenses, and death and funeral benefits.

Optional accident benefits will no longer be applicable for people such as pedestrians, cyclists and certain passengers, but only for the named insured, spouse, dependents and persons specified in the policy as drivers of the automobile, Harry S. Binks, senior account executive at Jones DesLauriers, writes in a LinkedIn post. These changes will affect uninsured passengers and children, Binks writes.

“Children injured as passengers (e.g., on a school bus) typically rely on the insurance policy of a parent/guardian,” he says. “If parents have ‘opted out’ of optional benefits to save on premiums, those benefits (such as caregiver expenses) will not be available.

“The consequence of this is that for the parents of children injured in a school bus crash who do not own their own vehicle, they will have no other option but to sue.”

Passengers who do not have their own auto insurance policy (such as a household without a car) may also have no access to extra support beyond basic medical coverage, putting them at higher risk, Binks adds.

Industry veteran and licensed Ontario broker John Baizana comments that “the implications for children and households without auto policies are exactly the kind of downstream consequences these reforms raise. If they shift more families into a position where litigation becomes the only path to recovery, that creates serious public policy concerns.”

“Not properly thought through”

Binks says he is “horrified” by the reforms. “I’m still shaking my head that these reforms were not properly thought through,” he writes. “Many children can ill afford to be without accident benefits coverage and may end up with no protection at all.”

In his own LinkedIn post, Baizana says with these reforms, the Ontario government is making an already complicated product even harder for consumers to understand. “When critical protections become optional, the system shifts risk onto consumers, many of whom may not realize what they are giving up until it is too late,” Baizana writes.

He wonders, “who sold this bill of goods to the politicians?” But Baizana doesn’t blame the lobbyists. “In this case, they must have delivered a politically convenient package: optional coverages, reduced baseline protections, and a talking point politicians could take to the doors and their stump speeches.

“When it comes to these new reforms, I have no doubt the figures presented showed the total potential savings for Ontario consumers,” Baizana writes. “Unrealistic that everyone would opt out of coverages? Sure, but that is a minor detail in a political presentation.

“We now know the individual savings are minimal, while the risks assumed by consumers are significant.”

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Both Baizana and Binks completed a training course delivered as part of a collaboration between the Insurance Brokers Association of Ontario (IBAO), the Insurance Institute of Canada, and the Ontario Mutual Insurance Association.

Baizana recommends brokers take this course, “multiple times if necessary. Now more than ever, your clients need your professional guidance.” He also recommends brokers regularly consult the Registered Insurance Brokers of Ontario website for updates, regulatory guidance, and common FAQs on these reforms.

Brokers commenting on the LinkedIn posts also raised other concerns ranging from the risk of broker E&O exposure, misunderstanding of the product by politicians, and insurers’ ability to bundle coverages (all with their own pricing).

IBAO CEO Colin Simpson said last year at the provincial broker association’s annual conference that optionality will only end up saving consumers about $100 a year at most. The largest savings come from opting out of income replacement benefits ($75 in savings/year) and non-earner benefits ($12/year).

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.