Toronto Injury Lawyer Blog
One of my jobs as a personal injury lawyer is to explain to our clients how the law works, and how the law applies to their case.
Most people have ideas about how the law should work. But, those ideas aren’t based on law, fact, or anything else. Rather their ideas about how the law works are based on feelings, or something they’ve heard in passing from a friend, colleague, or family member (usually not a lawyer). People want to believe what they want to believe. They have preconceived notions about how car accident law, and Ontario’s laws surrounding compensation should work. This is based on what they perceive to be “fair” and how they perceive the system to operate without having done any research at all.
The biggest misconception about car accident law in Ontario is that it’s fair.
The cold, hard, truth is that the laws surrounding car accident law, and the way which Courts compensate accident victims in Ontario is NOT FAIR AT ALL.
I’ve never heard anyone say that laws were meant to be fair, in particular, man made laws.
In fact the laws were drafted in such a way as to minimize the exposure of car insurers as much as possible so that they can maximize their profits. In turn, those savings which the insurers presumably were making on lower exposure were supposed to be passed along to the consumer in the form of lower auto insurance premiums. This pipedream never happened. What we see instead is that everyday Ontario drivers are paying more in car insurance premiums; and getting less in terms of coverage and benefits. This is shrinkflation, only it’s harder to see and to understand because insurance is not a physical product that we can taste, see or touch. Nor is it a product which we purchase everyday at a store, or online. Insurance is a product which people use everyday in the background, but hope to never have to call upon in the event of an unfortunate accident. It’s for those reasons that people remain unfamiliar with how it works. I tell people all the time that buying insurance, and making a claim isn’t like buying a pair of shoes or a litre of milk at a store. It’s much more complicated than that.
There are significant changes coming to car insurance in Ontario on July 1, 2026. On the theme of this blog, these changes aren’t “fair“.
Many coverages which were included under a standard car insurance policy won’t be standard anymore. Instead, people will have to purchase these coverages as addons, or riders to their polices as option benefits. They will have to “opt in” and purchase coverages which had existed under standard car insurance policies for decades. This model is yet another example of Ontario drivers paying for more, but getting less. In fairness to insurers, this sort of thing is being seen across all industries these days.
What is being removed?
Income Replacement Benefits (IRBs) + Death and Funeral Benefits (if someone dies in the car accident) + Non Earner Benefits (students, retirees, unemployed, disabled people) are gone! If you want these protections, you will have to pay for them.
This is significant. If you’ve been hurt or injured in an accident and can’t work, you won’t have standard accident benefit coverage under any 0f these categories if you don’t purchase optional benefits. This means:
- Can’t work after an accident? Don’t expect any interim benefits to make ends meet and pay for food, bills etc.
- Someone died in the car accident? The insurer won’t pay for the funeral costs.
- Out of pocket expenses not being covered by the insurer? No money will flow
This has a major impact on uninsured pedestrians and cyclists. It goes without saying that you don’t need car insurance to go for a walk or to ride a bike. But what happens if you go for a walk, or ride a bike and you’re hit by a car (and you don’t have your own car insurance)?
Before July 1, 2026, if this were to happen, the injured pedestrian or cyclist would have automatic access to claim the income replacement benefit (up to $400/week) or a death and funeral benefit in the event of a fatality:
- Spousal Payout: A $25,000 lump-sum payment to the surviving spouse
- Dependant Payout: A $10,000 lump-sum payment to each surviving dependant
- Cost of Funeral up to $6,000
After July 1, 2026, these benefits will no longer be available to an uninsured cyclist or pedestrian unless the pedestrian or cyclist is covered under their own policy, or someone else’s policy AND within those policies they’ve purchased these additional coverages.
This is a zero sum equation as these changes coming into force on July 1, 2026 present huge losses for innocent injured accident victims; and massive financial savings for car insurers across Ontario. I would love to see the actuarial calculations on the projected savings for insurers not having to pay income replacement benefits and death and funeral benefits on standard policies moving forward; along with the revenue generated for those few people who will actually pay for these coverages.
What will end up happening?
Few people will end up purchasing these additional coverages. The reason for this is when people are buying car insurance, they’re looking for the least expensive rates available. The least expensive rates will carry the minimum coverages; thus there won’t be any opt in protections being purchased in order to keep premiums down. Unfortunately, you pay for what you get. And when you pay for the cheapest coverage, you will get the cheapest coverage which won’t do very much to help make ends meet in the time of crisis following an accident.
The hardest hit will be the family members and loved ones following a fatality claim (funeral costs are expensive and there won’t be any access to interim benefits to pay for the cost of the funeral). Harder hit will be pedestrians and cyclists who are hurt or injured (or killed) in car accidents because they will only have bare bones coverage available to them.
