If you want to drive in Ontario - anywhere in Canada, in fact - you are legally required to have valid automobile insurance. Like any type of insurance, it is meant to safeguard you from financial risks, helping to cover costs if the unexpected and unfortunate occurs. Yet, despite the protection it provides, people tend to take a dim view of auto insurance, mainly because of the cost.
If the Ontario government is to be believed, help is on the way. The way we pay for insurance will change in the coming year in a move the province says will offer motorists the chance to lower their premiums. It sounds like good news, especially in times of economic uncertainty, but, as the familiar proverb goes, "if something sounds too good to be true, it probably is."
Ontario's no-fault automobile insurance regime will move to an "à la carte" model beginning on July 1, 2026, making all coverage optional except for medical, rehabilitation and attendant care benefits.
This means it will be on you to determine exactly what coverage you need beyond what is mandated by the government. You will be required to opt-in for such things as lost wages, non-earner benefits, expenses for damage to personal items, caregiver expenses, housekeeping expenses, death benefits and funeral benefits. And each protection will come at a cost to be determined by the individual insurance providers.
Automobile insurance reform is a continual process but we have yet to see the long-promised truly consumer-friendly policies. In 2016, for example, the $2-million limit for medical, rehabilitation and attendant care benefits for catastrophically injured people was reduced to $1 million. Three years later the provincial government promised to bump it back up but that still has not happened.
'Wider Range of Coverage Options'
The provincial government stated it had Ontario drivers in mind when the new opt-in plan was outlined in the 2024 provincial budget.
"We're going to allow consumers to have more convenience and choice," Finance Minister Peter Bethlenfalvy told a news conference at the time. "We want insurance to be affordable."
Drivers in this province will be provided "with an opportunity to lower their premiums by taking advantage of a wider range of coverage options to meet their needs," according to the budget outline.
Certainly, the concept may appeal to those looking for a way to reduce their auto insurance premiums. However, as Gluckstein Lawyer Senior Counsel M. Steven Rastin has noted, it is important to understand the real cost of the promised lower premiums.
"It sounds like a fine idea. But with the greatest respect to the finance minister, my concern lies with the very real possibility that some drivers may be left under-insured," he states. "This plan could mean the insurance coverage you once had will cost you more if you want to keep what are arguably essential benefits.
"It should be noted that the core price of auto insurance is subject to regulation, but insurers are allowed to set the price of optional benefits. It seems unlikely that those drivers who are having a difficult time making ends meet will be inclined to pay an extra $20, $30 or $50 a month for benefit options."
He said consumers may be able to save money when the new regime kicks in but with the caveat that while they will be paying less for a basic policy, they will be receiving less coverage than they presently have.
"Will people even buy optional insurance? Times are tight and those who are struggling financially look at ways to save money. However, these are also some of the people who can least afford to be without coverage," Rastin stated. "I am worried that this plan could ultimately be putting people in the position of gambling with their future. Those who don't have alternative benefits through no fault of their own could get into a car accident and find themselves with little or no coverage.
"They would then not have the money to pay for the basic necessities and would be forced to turn to welfare or the Ontario Disability Support Program," he added. "What was once the primary responsibility of the insurance company could indirectly become the primary responsibility of the taxpayer."
Difficult to Understand.
One of the problems with insurance coverage has long been that it can be daunting to comprehend. Offering discounts is all well and good but consumers who do not make an informed choice could be leaving themselves open to dire consequences.
It is no secret that auto insurance can be confusing. According to a 2022 Canadian Automobile Association (CAA) survey, more than half of Ontarians (53 per cent) found their auto insurance policy difficult to understand.
"While motorists know that they are required to carry valid auto insurance in Ontario, our research shows they may not fully understand what their policy coverage means. We often see motorists learn about their coverage once they need to make a claim," said the CAA's Elliott Silverstein.
It is not just insurance policies that are confusing. Consumers frequently deal with lengthy contracts that use complex legal language that is difficult to fathom. The same applies to online terms of service contracts that many people skim through and click "agree" at the end without fully understanding the total scope of the agreement.
Some people are confused by contracts that are intentionally designed to discourage people from reading them. Others assume that because a company is asking them to agree to terms, these contacts are standard and they have no choice. But it is important to bear in mind that if you have agreed to the terms of any contract, you will be expected to live up to its terms.
What Is in Your Policy?
Have you taken the time to review and understand your automobile insurance policy? If not, you are certainly not alone. It is not uncommon for people to come to us after a motor vehicle accident with questions about what exactly is covered under their policy. This can be an incredibly difficult time for them, especially if they discover they are underinsured and some of their financial needs may not be met.
This is what is so troubling about the forthcoming insurance regime. Because people naturally want to find ways to save on the bottom line, they may unintentionally omit an important piece of coverage in an "à la carte" model.
Automobile insurance policies are filled with jargon and industry acronyms. There are different types of coverage, some legally required and some optional. When a person signs up for insurance, they typically speak with a broker, who can explain the intricacies of the policy.
However, what generally happens after that initial broker contact is that consumers will get a renewal at the end of the term of the policy. They may only check what they are paying and compare it with past coverages. Unless there is a significant increase in their premiums or if that person has specific questions about their coverage, they may not speak to their broker again.
It is important for motorists to be proactive when it comes to their insurance. Especially with the new model that takes effect next July. Ask yourself if your circumstances have changed from when you first took out the policy. Does your coverage reflect that change? When you are choosing from the list of opt-in insurance coverages under the incoming regime, consider what would happen if you were to get into a motor vehicle accident.
July 2026 may seem like a long way off but it is in your best interest to start against questions now so you can build a policy that offers the protection tailored to your situation.
Do Your Homework.
Let's be honest, few people want to study their insurance policies but putting in some effort now may help prevent future heartache. The first step is understanding how automobile insurance works. The CAA has introduced an Insurance Guidebook to help consumers "gain the knowledge to feel comfortable having more advanced conversations about their policy."
"The Guidebook reflects common terms and issues related to Ontario's auto insurance system and policy and is designed to help educate Ontario drivers regardless of who their insurer or broker is," according to the association. "It was important for us to create a resource with easy-to-understand wording that informs motorists about the terms in their auto insurance policy and how it affects them so they can get the most out of their coverage."
I suggest some common-sense tips that may help you cut through the confusion. Read the entire policy and familiarize yourself with the essential terms such as premium, deductible and liability. Understand your coverage, limitations and exclusions and if you have questions or concerns, contact your broker. Never assume.
If You've Been in a Car Accident, Contact Us.
A serious motor vehicle accident can change your life forever and the costs associated with managing such a life-altering event can be immense. Our team of personal injury lawyers at Gluckstein Lawyers is here to help if you have been injured due to someone else's negligence.
Your initial meeting is free and without obligation on your part. We will never charge legal fees until your claim is settled. Contact us today.