Toronto, Ontario — Ontario is preparing to reform auto insurance in the province to reduce costs for drivers by making more features optional.
New auto insurance rules outlined in the 2024 budget report delivered on Tuesday by Finance Minister Peter Bethlenfalvy list that while medical, rehabilitation and attendant car benefits will continue to be mandatory for drivers, all other parts of auto insurance will be optional.
“This would allow drivers to lower their premiums by taking advantage of a wider range of coverage options to meet their needs,” the provincial budget explained.
“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 provider.”
The budget stipulates that auto insurance companies would be responsible first for medical and rehabilitation costs, even if other insurers also cover people. Specifically, regardless of the extent of the injuries sustained in a car crash, costs would have to be paid by auto insurers to help make sure insurers are paying for the people being covered.
This change, the province noted, would help reduce red tape for both patients and health-care providers.
Bethlenfalvy further 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 also suggested.
“I don’t think this is where we have any sort of specific numbers in terms of the rate of increase or decrease.”
The new plans follow a separate opt-out that came into effect earlier this year when the Financial Services Regulatory Authority of Ontario removed the requirement for car owners to have Direct Compensation Property Damage coverage on their vehicles.
New Democratic Party (NDP) leader, Marit Stiles has since voiced concern about the new plans, stating 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.
While aspects of collision coverage may be optional, car owners will ultimately not be 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.”
