Major Updates to Ontario Auto Insurance Benefits Coming in 2026

As of July 1, 2026, Ontario will see one of the biggest shifts in the auto insurance system, and we will break down how these changes will significantly impact drivers and claimants looking for assistance under these insurance policies. These updates will not only reshape the structure of accident benefits, but it will change coverage that is mandatory, and how insurers respond after a collision. No doubt, changes are aimed to provide drivers with more choice and flexibility, but they also introduce new risks. The risks that could leave accident victims underinsured if they are not properly informed.

We know that having in-depth knowledge of these updates is essential. However, experienced auto accident lawyers at Reyes Tam Law can help you get a close understanding of updates in the insurance landscape.

What the 2026 Changes Mean for Every Ontario Driver

Beginning July 1, 2026, Ontario’s accident benefits system under the Statutory Accident Benefits Schedule (SABS) will undergo a major shift. According to the Financial Services Regulatory Authority of Ontario (FSRA), all auto insurance policies renewing on or after this date must comply with the new framework.

These benefits include income replacement, caregiver support, housekeeping assistance, and other financial protections designed to support recovery.

These changes mean that the decisions you make when purchasing or renewing your policy today will directly impact the benefits available to you if you’re ever injured in a collision. Auto insurance is no longer just about choosing the lowest premium. What coverage you select, or choose to decline, could significantly affect your financial security after an accident.

Besides, only the following benefits will remain mandatory under all auto insurance policies:

• Medical benefits
• Rehabilitation Benefits
• Attendant Care Benefits

All other accident benefits will become optional. It means that drivers can actively choose and pay for them when purchasing or renewing their policy.

This new “build-your-own” benefits model shifts more responsibility onto drivers to understand their coverage and make informed decisions.

Optional Benefits That May No Longer Be Automatic

Under the new system, the following advantages will no longer be automatically included unless selected as optional coverage:

• Income replacement benefits
• Caregiver benefits
• Housekeeping and home maintenance
• Non-earner benefits
• Death and funeral benefits
• Visitor expenses

Drivers who do not choose any of these benefits may save on premiums, yet they also risk losing important financial support after a serious accident. For individuals who are self-employed, work in physically demanding jobs, or support family members, the absence of income replacement or caregiving benefits can be devastating. This is where consulting an insurance claim lawyer before an accident can make a meaningful difference.

The New Rule of “First Payer”

Auto insurers will become the first payer for eligible rehabilitation and medical expenses related to a motor vehicle accident with the upcoming reforms. This means that instead of having to exhaust workplace benefits or private health plans first, the auto insurer will respond first.

The change is intended to streamline access to treatment and reduce delays in care. However, it also places greater control in the hands of insurance companies, increasing the likelihood of disputes over treatment approvals, coverage limits, and benefit eligibility.

When disagreements arise over priority of the insurer, having an experienced Accident Benefits Lawyer on your side is essential.

Why These Changes Matter for Accident Victims

The reforms are intended to be beneficial to consumers; however, it should be noted that these new reforms present many risks that drivers will need to understand:

1. The risk of driving while underinsured: Drivers who do not opt for additional benefits may find themselves without any form of income replacement or assistance with caretaking if they have an auto accident in which they become seriously injured. If a serious injury occurs, there may be a long-term negative impact on the driver’s finances.
2. The likelihood of increased complexity in legal claims: Because of the reduced accident benefits available, more injured persons are likely to pursue tort claims against drivers who caused their injuries. The tort claims process can be complex, require a significant amount of time, and be commonly disputed by insurance companies.
3. Limited available coverage for non-policyholders: Optional benefits can only be applied to the named insured and their immediate family members. Thus, if no uninsured or underinsured drivers are involved in an accident, the number of eligible victims may be reduced.

Recognizing these facts is critical in order to properly evaluate an auto insurance policy and the related legal rights.

How Reyes Tam Law Protects Injured Drivers

At Reyes Tam Law, our team of skilled auto accident lawyers and Accident Benefits Lawyers is committed to protecting the rights of injury victims throughout Ontario.

We assist clients by:

Reviewing Insurance Coverage
We help drivers understand how the 2026 reforms affect their policies and which optional benefits may be essential based on their lifestyle and financial responsibilities.

Managing Accident Benefit Claims
If you are injured in a collision, we handle communication with insurers, challenge benefit denials, and ensure you receive the medical and financial support you are entitled to.

Pursuing Tort Claims
When accident benefits are insufficient, our legal team aggressively pursues compensation from at-fault parties to cover pain and suffering, lost income, and long-term care needs.

Providing Clear Legal Guidance
Insurance policies and claims processes can be overwhelming. Reyes Tam Law provides straightforward, compassionate legal advice during what is often one of the most difficult times in a client’s life.

What Ontario Drivers Should Do Before 2026

With these changes approaching, drivers should take proactive steps now:

Find out when your insurance policy is up for renewal.

Review your auto insurance policy carefully before renewal.

Ask your broker which benefits will remain mandatory and which require optional selection.

Consider how a serious injury would affect your income, family, and long-term health.

Ask questions regarding benefits, terms, changes, applications, and anything that you remain uncertain about before blindly agreeing to the new policy. Remember that even if your current policy does not expire before July 1, 2026, you can still make changes to your policy to suit your lifestyle changes and growing needs.

Speak with an experienced accident benefits lawyer at Reyes Tam Law to assess your risk exposure.

Early planning can prevent costly surprises later.

Bottomline: Preparing for a New Auto Insurance Reality

The change in Ontario’s automotive insurance in 2026 has opened up many new choices regarding accident benefit arrangements and how they can be accessed. Whilst greater choice may be attractive to different types of drivers, these developments also expose drivers to a greater risk of being underinsured in the event of an accident resulting in serious injuries.

Should you require assistance with the many options available to you for automotive insurance or have sustained serious injuries as a result of an accident and need legal representation, Reyes Tam Law is here for you. We have experienced automotive injury attorneys as well as dedicated Accident Benefits attorneys to ensure you have your legal rights protected and claim the compensation that you are entitled to for injuries sustained in an accident.

Reyes Tam Law has the legal expertise with a proven track record to help you prepare for the transition to the new automotive insurance laws in Ontario. Contact us for your free consultation today.