Updated: 2026-07-09 | Premiums and terms are subject to your insurer’s actual policy and official Ontario government announcements
Ontario’s auto insurance rules changed in a notable way starting July 1, 2026: some accident benefits that used to be mandatory under standard policies are now optional, with only medical, rehabilitation, and attendant care benefits remaining mandatory. For anyone buying a car in Ontario or reviewing an existing policy, this means the premium structure now looks a bit different from before, and it’s worth understanding what changed.
This change traces back to a 2022 report from Ontario’s auditor general, which found that Ontarians were paying the highest auto insurance rates in the country. The province’s move to make some benefit categories optional is meant to let consumers tailor their coverage to what they actually need, instead of paying for benefits they’ll likely never use. Industry estimates suggest customers who switch to the most basic coverage option could save roughly $100-200 a year, though the actual savings depend on what was in your original policy and what you choose in the new plan.
At the same time, broader upward pressure on auto insurance rates hasn’t gone away. As of early 2026, the national average annual car insurance premium in Canada is about $1,973, up roughly 11% year over year; an industry report (WTW’s “Insurance Marketplace Realities 2026”) also projects auto liability rates could rise a further 8% to 20%, suggesting insurers are still pricing in higher risk. In other words, making certain benefits optional doesn’t necessarily mean your overall insurance cost will drop — whether you actually save money depends on whether your old policy included benefits that are now optional and that you don’t really need.
Home insurance, while a separate policy, is facing similar pressure worth mentioning: years of compounding weather-related losses have pushed Ontario home insurance premiums up roughly 84% over the past decade, and insurers actually lost money on home insurance in both 2023 and 2024 — premiums are expected to keep climbing in 2026. For anyone who just bought property in Ontario or is up for renewal, shopping around and reviewing coverage carefully matters more than it used to.
For newcomers or anyone buying a car in Ontario for the first time, the practical approach when renewing or taking out a new policy is to go through each accident benefit now marked optional and decide whether you actually need it, rather than defaulting to the old standard package — and to compare quotes from at least two or three insurers for both auto and home coverage. For BC’s auto insurance system, see our guide to how ICBC car insurance premiums are calculated, and pair it with our Toronto travel guide for other practical details on living in Ontario. Please confirm actual terms, premiums, and optional coverage directly with your insurer — this article is for general understanding only.
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