New auto insurance rules could let Ontario drivers opt for less. But by how much?

Ontario is preparing to reform how auto insurance works in the province in a bid to reduce the coverage drivers are forced to take out, a move that could reduce the costs people pay.

New auto insurance rules outlined in the 2024 budget, unveiled by Finance Minister Peter Bethlenfalvy on Tuesday, list elements of auto insurance that could become optional.

The Ford government said medical, rehabilitation and attendant care benefits would continue to be mandatory for drivers. All other parts of the insurance, however, will be optional.

“This would provide drivers with an opportunity to lower their premiums by taking advantage of a wider range of coverage options to meet their needs,” the provincial budget explains.

“For example, drivers may already have access to certain benefits through their workplace benefit plans, so they should have the choice not to have to pay for them twice through their auto insurance policies.”

Bethlenfalvy said the move would “allow for consumers to have more convenience and choice” in how they pay for the vehicle insurance.

“And by that I mean they’ll have the opportunity to select the coverage that they need,” he said.

The reforms won’t necessarily lower auto insurance rates, he suggested.

“I don’t think this is where we have any sort of specific numbers in terms of the rate of increase or a decrease,” Bethlenfalvy said.

The budget stipulates that auto insurance companies would be on the hook first for medical and rehabilitation costs, even if people are also covered by other insurers.

Regardless of the extent of the injuries sustained in a car crash, costs would have to be paid by auto insurers first before other, extended health-care plans would come into play.

That change, the province said, would help make sure it is auto insurers that pay for the people they cover, while also reducing red tape for both patients and health-care providers.

NDP Leader Marit Stiles suggested that the people who will choose to have less auto insurance coverage may have to do so for the wrong reasons.

“My concern — and I think the concern of our caucus and our party — is this is going to force Ontarians who are looking for more affordable options, frankly, to take on an additional risk that they shouldn’t be forced to take on,” she said.

The new plans follow a separate opt-out that came into effect in 2024 when the Financial Services Regulatory Authority of Ontario removed the requirement for car owners to have Direct Compensation Property Damage coverage on their vehicles.

Daniel Ivans, an insurance expert with Ratesdotca, previously explained that change to Global News: “What that coverage does is it makes sure that you have coverage for damages to your automobile or the property that it’s carrying when another motorist is responsible.”

He also said DCPD coverage sees the insurer pay out when their client is not at fault for an accident.

While this type of coverage joined collision coverage in being optional, car owners will not be completely free to decline all coverage.

“What you have to buy is still a third-party liability,” Wilfrid Laurier University professor Mary Kelly said. “You still have to buy an amount that protects other people from things you could do on the road.”

— with files from Global News’ Kevin Nielsen and The Canadian Press

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