Should your Ontario clients drop optional auto accident benefits?

As Ontario prepares to introduce optional auto accident benefits, one broker warns clients who reduce coverage may be giving up protections they are most likely to need following an accident.

Effective July 1, 2026, Ontario will change its Statutory Accident Benefits Schedule (SABS), making only medical, rehabilitation and attendant care benefits mandatory. Drivers purchasing new policies must opt into coverages such as income replacement, caregiver benefits, housekeeping expenses, and death and funeral benefits. Those renewing their policies will be able to opt out of these coverages if they already have them.

Steven Harris, a LowestRates.ca expert and licensed insurance broker, says the change offers more flexibility for consumers. However, they will need to understand what they are giving up, so that they don’t unintentionally remove protections they may require after a collision.

“Many of the benefits that are becoming optional are the ones people rely on most during recovery,” Harris says. “If someone is injured and unable to work, or if their family needs support after a serious collision, opting out of these protections could create significant financial strain.” 

Key areas of concern

Harris highlights several areas drivers should pay attention to as Ontario transitions to à la carte coverage: 

• Income replacement and non-earner benefits: Provide financial support if a driver is unable to work after an injury or does not have employment income. These benefits play an important role in maintaining household stability during recovery, Harris says. Once the new model takes effect, drivers will need to consider whether losing this income support would create financial pressure. 
• Death, funeral, caregiver, dependent care, and housekeeping supports: Assist families with final arrangements and provide help with dependents, caregiving responsibilities, and household tasks. Serious injuries can make daily living difficult, and without these benefits, families may face significant out-of-pocket costs for services they rely on during recovery. 
• Home maintenance, visitor expenses, and education-related benefits: Cover costs such as home upkeep, travel for family members providing support, and school-related expenses affected by an accident. While these benefits may appear secondary, removing them could expose drivers to unexpected financial burdens, LowestRates.ca warns.
• Indexation and other optional supports: Indexation ensures benefits keep pace with inflation during long recovery periods. Declining this option may reduce the real value of financial support over time, particularly in cases involving extended rehabilitation. 

“My biggest advice is to slow down and ask questions,” Harris says. He advises clients to work with their brokers to understand what each benefit covers and what it would cost to go without.

“Optional accident benefits make up only about 5% of the premium, so the savings are modest,” he says. “Drivers need to consider whether saving that small amount is worth the risk of being underinsured after a collision.

“For most people, it is simply not worth it.” 

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 said last October during a panel discussion at IBAOcon.

Early estimates show a consumer can save about $75 yearly by opting out of income replacement benefits and $12 by opting out of non-earner benefits, Simpson said at the time. Other benefits amount to dollars a year, while dependant care and death benefits could save consumers only cents per 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.