Ontario auto insurance changes coming July 1, experts say savings are modest

Changes are coming to auto insurance in Ontario. Starting July 1, nine standard accident benefits will become optional.

Experts warn the cost savings are very modest, especially compared to the insurance coverage you may be losing.

Drivers on Ontario roads will have more choice when it comes to auto insurance this summer.

While standard medical, rehabilitation and attendant care benefits will remain mandatory, a number of auto accident benefits are moving to an opt-in model.

That includes income replacement benefits, caregiver benefits, damage to personal items, death benefits and funeral benefits, among others.

The Ontario government announced the change early this year, saying it “allows drivers to find a policy that fits their needs.”

It is important to note that nothing automatically changes on July 1. You have to renegotiate your current policy or be purchasing a new one.

While the change will allow greater choice when it comes to your policy, experts say it likely will not make much of an impact on your wallet.

“So we looked at a driver who pays $1,500 a year in insurance, which is kind of the average, and by opting out of all of the optional ones, it saved $60. So that’s the first thing clients should know, this is not a major cost savings,” said Travis Cairns, a certified financial planner with Desjardins Insurance.

READ MORE: Food Banks Canada says employment insurance doesn’t serve modern workforce

Cairns says while there are some scenarios in which drivers should opt out of some of that coverage.

“So the income replacement is one that there are people it doesn’t apply to. If you’re a retiree, and your income comes whether you’re hurt or not because you’re not actively earning it, then you don’t need that coverage,” Cairns says.

He and other experts also advise that drivers speak to a broker first to make sure they do not need those benefits, or that they are covered by other insurance, before opting out.

“Don’t just assume that it makes more sense to save a quick buck because in the long run, it might not. Car accidents are one of the most common accidents that cause injuries,” says Rajiv Haté, a senior lawyer with Kotak Personal Injury Law.

Haté points to the income replacement benefits that alone provide up to $400 per week to someone injured in a car accident.

“Little do you know if you’re injured in a car accident, regardless of how serious your injuries are, you’re going to have to miss time from work, and that’s your income replacement. How are you going to pay your bills? Your mortgage?” Haté said.

WATCH MORE: ‘Fight Ford’ movement gaining momentum as 62 protests held across Ontario