Auto insurance premiums in Ontario could see a decline in the upcoming summer, but this might come at the expense of reduced coverage for many individuals. Effective July 1, there will be modifications to mandatory accident benefits within standard insurance policies in the province. While this change offers drivers more choice in their coverage options and potential savings of $100-200 annually by selecting basic coverage, experts caution that opting for lower premiums could leave drivers more exposed to risks in the event of an accident.
Previously, certain benefits like income replacement, lost educational expenses, death benefits, and funeral expenses were automatically included in policies. However, starting July, these benefits will become optional, with only medical care, rehabilitation, and attendant care benefits remaining mandatory. Insurance broker Lance Miller highlights the importance for consumers to understand the implications of forgoing optional benefits to ensure they are adequately covered.
The adjustment in mandatory benefits follows a 2022 report by the province’s auditor general, which revealed that Ontarians were facing the highest auto insurance rates in the country. In response, Doug Ford’s 2022 election campaign promised reforms to provide consumers with more flexibility in their insurance choices over time.
For existing auto insurance policyholders, their coverage will remain unchanged, with the July 1 alterations applying solely to new or updated policies. Insurance brokers have been directed by the province to reach out to their customers to offer them the option of adjusting their policies accordingly.
Beyond drivers, non-drivers may also be impacted by these changes. David Shellnutt, also known as The Biking Lawyer, expresses concerns about the potential risks to uninsured victims of accidents as a result of the revised benefits plan. Under the new system, only the driver, their spouse, and dependents will be covered under optional benefits. This shift may leave pedestrians and cyclists vulnerable if they lack their own auto insurance or alternate benefits plan.
While these changes aim to provide drivers with more choice and convenience in selecting insurance policies, some experts, like Daniel Ivans from rates.ca, caution against solely reducing coverage as a means to lower premiums. Ivans advises consumers to explore different insurance providers for competitive rates before considering adjustments to their policies. Ultimately, he suggests that shopping around for better deals rather than cutting coverage may be a more prudent approach to managing insurance costs.