Toronto Injury Lawyer Blog
On July 1st, 2026, the Ontario Government allowed all car insurers to change what benefits were benefits came standard under an ordinary car insurance policy. These changes did not benefit your average consumer. These changes benefited car insurers because they could ask for the same amount of money in premiums, yet be on the hook to pay out far less in benefits under that same policy.
Here are some of the benefits which used to exist under a standard car insurance policy before July 1st 2026, but were eliminated thereafter:
$185/week Non Earner Benefit x 104 weeks = $19,240 eliminated under standard policy
$400/week Income Replacement Benefit x 104 weeks = $41,600 eliminated under standard police
$3,000/month x 24 months = $72,000 eliminated under standard policy
Cost of Funeral = $6,000 Max Benefit eliminated under standard policy
Death Coverage for Surviving Spouse = $25,000 eliminated under standard policy
Death Coverage for Dependant Children = $10,000 per child eliminated under standard policy
These are some serious savings for Ontario Car Insurance Companies! These benefits were standard under a run of the mill car insurance policy. These benefits were available to people who didn’t have their own car insurance, but who were involved in car accidents themselves. Think of people like:
- Pedestrians who were hit by a car through no fault of their own
- Seat Belted Passengers who were involved in a car accident through no fault of their own
- Cyclists who were hit by a car through no fault of their own
Before July 1st, 2026, all of the benefits detailed above were available to these people, whether or not they had car insurance, or not, under a standard auto policy.
After July 1, 2026, all of these benefits were stripped away from all Ontarians under a standard car insurance policy. If you want these benefits available to you, a person needs to pay extra for them. If a person doesn’t drive, or have access to a car, then these benefits won’t be available at all (unless they’re identified as a dependent or additional party on someone else’s car insurance policy). Odds are a cyclist who doesn’t have a driver’s license won’t have access to these benefits at all because they won’t have the opportunity to by this sort of coverage.
Because these benefits were stripped from a standard car insurance policy, it would make sense that the cost of insurance premiums would go done sharply. But alas, they haven’t. Don’t ask me. How about you check your car insurance premiums and ask yourself whether or not your premiums have even decreased over the past year, 3, years, or 5 year period. In that same period of time, while your premiums have likely increased, the benefits available to you under the same policy have only gotten worse and worse. It’s a phenomenon we see across all sorts of sectors these days were consumers are paying more, only receiving far less. Some refer to it as “shrinkflation“. I call it price gouging.
This is unacceptable on so many level.
For starters, car insurance is mandatory for Ontario drivers. As such, it’s highly regulated by the Government. This is a Government which the people have elected. Yet, every change made to mandatory car insurance seems to go against the people which they are seeking to protect and empower. It seems that each Government which is elected tinkers with car insurance such that the changes go against the very same people who they serve. Instead, the Government makes changes which favour large insurance companies; which; last time I check, insurance companies aren’t able to cast a vote (people do!).
The Insurance Act, the the pricing of car insurance as a whole has been characterized by the Courts as consumer protection legislation. It’s there to protect the people from being taken advantage of in a highly regulated system. Yet, change after change seems to do the very opposite. It’s taking advantage of all people from all walks of life, and all socio-economic sections of our population. The affluent urban cyclist who is without car and thus without need of car insurance is just as vulnerable as a homeless pedestrian in a car accident. The same can be said for a passenger who was in the wrong place at the wrong time for a car accident. They will all be without the protections which were previously afforded to them prior to the July 1st 2026 changes to the accident benefits system. How does this benefit anyone at all? The only party which benefits is not a person at all. The only party which benefits is a large, multi national car insurer which no longer has to pay any of the benefits detailed above. The financial savings are immense. I’m sure that the actuaries have done the calculations on the savings which this will present to the insurers which will be astronomical. We aren’t taking a few thousand, or a few million dollars here, it’s much more than that.
At the end of the day, it really makes you wonder. Are these savings really being passed along to the consumer? These are the very people we are trying to service and to protect. Instead, the benefit goes directly into the pockets of large, publicly traded insurance companies which don’t have a vote in any election.
The average person could care less about car insurance. They pay it, and pray that they don’t need it. It’s only when they need it (which happens more than you might think) that they realize that they’re forced to pay for a subpar product which really doesn’t do very much. The burden falls on the public healthcare system. People aren’t getting the treatment they need from car insurance so they aren’t recovering as well, or as quickly from their accident related injuries. They can’t work (need to claim ODSP, OW, EI); and can’t cope with their pain (need to go to hospital, a walk in clinic, urgent care, or see the doctor more frequently). The cuts have an impact. One which you don’t see, until you or a loved one has lived it following a serious car accident.
