Ontario proposes new auto insurance rules: Here’s what to know

The Ontario government has introduced auto insurance reforms in its 2024 budget to offer drivers more affordable options and improve access to benefits. As a consumer looking for the best auto insurance rates, it's important to understand how these upcoming changes will affect your coverage.   

The reforms are not yet finalized, but here’s what the government has proposed: 

More optionality in auto insurance 

Medical, rehabilitation and attendant care benefits will remain mandatory, while all other benefits may become optional.  

"We are moving forward with auto insurance reforms that would provide more choice and flexibility to drivers in order to keep their premiums more affordable," said Finance Minister Peter Bethlenfalvy during his announcement of the new budget in the legislature. 

For example, if you already get certain benefits through your workplace benefit plans, you'd now have the choice to not have to pay for them twice by also having them in your auto insurance.  

This comes on the heels of another recent change to mandatory insurance implemented by the Ontario government – the option to remove Direct Compensation – Property Damage (DCPD), which allows drivers to claim damages from a collision in which they are found not at fault. The removal of DCPD, introduced in January 2024, was first raised as an Ontario budget item in 2022.   

Read more: How much car insurance do you really need? 

First payer principal

The government proposes that after an accident, auto insurance will cover medical and rehabilitation benefits before extended health care plans kick in. This applies to all auto accidents, regardless of the seriousness of injury. 

Guideline reviews

The Ontario Government is commissioning the FSRA to review and update guidelines related to professional services and attendant care hourly rates, which are used to calculate the monthly benefit payable to accident victims who need attendant care.  

The findings from this review will also influence changes to the Statutory Accident Benefits Schedule (SABS), which outlines the benefits available to individuals injured in auto accidents.  

There will also be a review of the Health Service Provider Framework and the Health Claims for Auto Insurance systems to look for cost and administrative efficiencies.   

Learn more: What auto insurance coverage is mandatory in Ontario? 

Fair use of territorial ratings

The Ontario Government, in collaboration with the FSRA, is reviewing pricing methods for territorial ratings, which assess risk based on where a driver lives. 

In January 2024, FSRA launched a pilot program in which auto insurance companies in the Greater Toronto Area (GTA) can propose and test changes to how they decide on insurance rates for private cars to improve fairness in auto insurance pricing. The government stated in the budget that the pilot will remain and may eventually apply to other regions. 

Product and services innovation

In January 2022, the government and FSRA established a Test and Learn Environment to create more innovative auto insurance options, which will continue to be expanded on. 

The FSRA states that all TLE testing will be geared toward innovation in Ontario’s non-capital market financial services sectors: 

• Property and Casualty Insurance 
• Life and Health Insurance 
• Credit Unions and Caisses Populaires 
• Loan and Trust 
• Mortgage Brokers 
• Health Service Providers as they relate to Auto Insurance 
• Financial Planners and Advisors 

Read next: How to estimate the cost of insurance before buying a car 

Auto theft prevention

To tackle auto theft, the Ontario Government is planning to provide funding to police services and raise public awareness of auto theft prevention measures. Here's what they're planning to do:  

• The government is investing $46 million over three years to support patrols and improve safety, including the purchase of four helicopters. These additional supports will help keep highways and roadways safe from street racing, impaired driving, violent carjacking, and automobile theft.  
• The government is providing $49 million over three years to help Ontario police catch those responsible for auto thefts and to stop the illegal export of stolen vehicles.  
• The FSRA will be launching an anti‐auto‐theft campaign that focuses on consumer awareness and auto theft prevention. 

When will these changes be implemented?  

There are no fixed timelines for implementation. However, Impact Public Affairs, a strategy partner with the Insurance Brokers Association of Ontario (IBAO), stated in a memo sent to the IBAO that the government "understands the legal liability risks to brokers and that communicating and implementing these changes across Ontario will require time." 

The announcement of the proposed changes is a policy decision, with official legislation likely to come in the late fall or early winter of 2024, followed by a lengthy consultation process.  

The final implementation of these proposed changes is expected in 2026. 

Related: How to switch car insurance providers