Ontario’s 2026 auto insurance reform: navigating modular accident benefits and supporting consumer choice.

Authors:

Jullie Hands, Shaheen Minhas, Duncan Meadows, Rika Hara, Mahjoti Karimi, Aditi Mathur, Anjali Gandhi and Kay Goffenberg

Ontario’s 2026 auto insurance reform gives consumers more choice and flexibility—are you prepared for what’s ahead?

In brief

• Ontario’s 2026 auto insurance reform introduces modular benefits, giving consumers more control and responsibility over coverage choices. 
• Insurers and brokers must enhance education and support to help consumers navigate new options and avoid coverage gaps. 
• Technology and clear communication are critical for a smooth transition, operational readiness, and building consumer trust.

Starting July 1, 2026, Ontario will introduce the 2026 Auto Insurance Reform, a modular benefits model that will reshape the Statutory Accident Benefits Schedule (SABS).

While medical, rehabilitation and attendant care benefits will remain mandatory, all other accident benefits, including income replacement, caregiver, housekeeping, non-earner and funeral benefits, will become optional.

This reform will also position auto insurers as the first payer for medical or rehabilitation claims, except medication expenses, replacing private health plans in the coverage hierarchy. This will allow consumers to preserve their workplace benefits for other life events. This change means insurers must take on new roles and responsibilities, but it also opens the door for them to stand out and earn their customers’ trust. 

Customer understanding drives outcomes 

The reform is designed to put consumers in the driver’s seat by empowering them to choose the coverage plan that fits their needs and budget. While some may see modest savings, the real significance lies in how the reform redefines consumer agency. By placing decision-making power directly in the hands of policyholders, the reform challenges insurers and brokers to move beyond transactional conversations and toward enabling confident, informed choices. 

The opportunity is not just to explain cost implications, but to help consumers understand the trade-offs between coverage options and make decisions that support their long-term protection goals.

Supporting informed decisions for consumers

With the introduction of the new modular framework, policies will automatically renew with existing coverage unless consumers actively choose to remove optional accident benefits. It is now important for consumers to review which optional accident benefits they wish to retain or remove, and to consider where they may already have coverage through workplace or private insurance plans. 

Every consumer will approach these decisions differently; without adequate support, vulnerable groups such as lower-income households and those without existing coverage could face increased exposure.

Under the new regulations, optional accident benefits will now apply exclusively to the named policyholder, their spouse, dependents and listed drivers, excluding others unless they’re separately insured. That’s a big shift from the previous system, where any person injured in an auto accident was entitled to these benefits, regardless of their insurance status.

This is why education matters. Insurers and brokers will need to clearly and accessibly educate consumers about these trade-offs using simple tools and straightforward conversations. The goal is to move beyond overloading consumers with information and toward understanding what it means for their own unique situation. 

Enabling confident decision-making for consumers by simplifying the product choices

As coverage becomes modular, consumer choices increasingly shape outcomes. Now, insurers must rely on the attach rates — that is, how many customers choose to retain optional benefits — to define their product mix. 

The insurers who stand out will be those who make it easier for customers to navigate these choices. By organizing optional benefits into clear, needs-based packages and guiding consumers to make informed choices, insurers can help prevent gaps in coverage and ensure products align with actual needs.

Technology should enable simplicity 

Technology can make insurance products clearer for consumers right when they need it most, whether getting a quote, reviewing policies online or making coverage decisions. 

To support compliance and accountability, audit trails should be built into the process, capturing each step of the consumer decision-making journey. Increasingly, consumers expect to see, in real time, how their choices affect pricing and coverage. 

Aside from consumer-facing tools, technology plays a role in supporting the evolving product model. This includes updating ratings, underwriting approaches, document packages, as well as internal training toolsets to reflect new coverage options. For a consistent and seamless experience, systems across policy, billing, claims and digital platforms should work together to reduce friction between teams to build the reform changes cohesively. 

Conduct and culture shape consumer trust

As consumers face new choices, some will feel empowered, while others will be caught off guard when coverage gaps emerge. In moments like these, regulators and the public will be paying attention to how insurers respond. 

Trust built through how insurers behave, communicate and support consumers through this change is critical. Internally, this means teams need to work together to offer clear guidance to consumers, share accountability and ensure messaging is consistent across the organization. 

Driving operational readiness across the value chain

Every function across the insurance value chain, including pricing, underwriting, claims, distribution, IT and compliance, has a role to play in making the transition smooth for consumers. To stay ahead, insurers will need to invest in training, update processes and ensure systems support clear, consistent decision-making.

In addition, insurers will need to review and refresh consumer-facing and internal materials, such as policy wording, product filings, broker scripts, dynamic job aids and training guides to reflect the new modular benefits model. This is an opportunity to build trust through clearer touchpoints with customers. To support customer education, the FSRA has developed a toolkit of standardized communication resources that includes a customer letter, email template and Q&A to ensure consistent and clear messaging throughout the transition.

Mapping the new consumer journey

The reform introduces a new consumer journey that demands clarity, empathy and proactive guidance at every stage:

1. Awareness and education
2. Quote and selection 
3. Claims experience 
4. Reflection and renewal 

When the reform lands, many will ask: “How much can I save?”. However, it would be more helpful to ask, “Who can help me make the right choices?”

At every step, the opportunity for insurers is clear: simplify complexity, guide with clarity and build trust through every interaction. Insurers that invest in tools, training and communication to support this journey will be better positioned to earn loyalty and deliver on the promise of protection.

The time to prepare is now

The reform is fast approaching. Renewals for July 2026 begin as early as March, leaving a limited window for insurers to prepare. 

We can help set you up for a smooth transition and build trust with consumers by helping you proactively address the following key areas:

Consumer education and broker training

• Educate consumers on the implications of opting in or out of benefits during renewals, using tools like real-life scenarios and cost-benefit comparisons
• Train brokers and frontline staff with simple, practical discussion toolkits
• Refresh communication materials, including policy wording and product filings

Product & pricing design

• Refine product model to offer clearer, needs-based coverage options
• Update underwriting workflows and pricing algorithms 
• Align changes across policy, claims and digital platforms

Technology enablement 

• Enhance quoting engines and consumer portals 
• Update broker integration capabilities to align with core system updates
• Prepare systems for increased service demands in claims handling

Operational governance

• Segment customers to align with needs and risk profiles
• Strengthen internal controls and governance to manage reputational risk
• Monitor claims handling quality, service levels and documentation standards
• Prepare for potential shifts in litigation patterns