By Jason Frost
With Ontario Regulation 383/24 (https://www.ontario.ca/laws/regulation/r24383), the Ontario Government has amended the SABS for policies issued after June 30, 2026, to remove many of the previously standard SABS benefits for most persons injured in an accident on Ontario.
The impact of these changes may be catastrophic.
The Amended Regulation Will Likely Harm Insureds, Auto Insurers, and the Province
Starting July 1, 2026, named insureds in Ontario may decline to purchase optional benefits for most benefits under the SABS (parts II, IV, V and VI), including:
- Income Replacement Benefits
- Non-Earner Benefits
- Caregiver Benefits
- Housekeeping Benefits
- Lost Educational Expenses
- Visitors Expenses
- Clothing Damage
- Funeral Benefits
- Death Benefits
One practical consequence that immediately leaps to mind is that many insureds who do not have access to an income replacement benefit may struggle to rehabilitate themselves and re-enter the workforce in a timely way. Alternatively, they may try to not take any time off work and not obtain timely rehabilitation in the first few weeks following an accident.
In either scenario, it seems likely that increased risk of damages will be passed on to a related tort claim, including higher past and future loss of income claims, past and future care costs, and higher PJI. Also, tort defendants will no longer have access to weekly benefit s. 44 Insurer Examination reports within the first 1 – 3 years after an accident produced pursuant to a discovery undertaking and instead will only be able to rely upon Defence Medical reports completed 4 – 6 years after an accident. This too, will increase the tort payouts.
Many amounts that would traditionally have been paid by the accident benefits insurer will now be paid by the insurer of the tort defendant, plus interest and costs (there are effectively no costs in the current LAT AABS dispute resolution system). As such, automobile insurance policy premiums are likely to increase, not decrease.
There are further systemic issues with these changes that will likely impact more than 50% of Ontarians (in this author’s practice experience, at least).
The historic purchase rate for optional benefits has been in the 2-8% range for most Ontario insurers (https://otlablog.com/how-many-people-actually-buy-optional-accident-benefits/). In the past 30 years, approximately 90% of Ontario consumers opted to purchase less expensive automobile insurance (such as the plaintiff in Godina v. Tripemco Burlington Insurance, 2013 ONSC 979 (CanLII, https://canlii.ca/t/fw2xb). There is no reason to expect that historic trend to change, particularly while consumers are trying to make ends meet while facing increased costs of living (the Consumer Price Index increased by 3.9% in 2023 – https://www.statcan.gc.ca/en/subjects-start/prices_and_price_indexes/consumer_price_indexes).
The most significant impact of the amended SABS will affect those without any choice: “insured persons” who do not have their own policy and who claim accident benefits under a fleet policy insuring a vehicle involved in the accident.
This includes all:
- Company vehicles;
- Transport trucks;
- Garbage trucks;
- Buses;
- Shuttles;
- Municipal vehicles;
- Provincial vehicles;
- Federal vehicles;
- Public transit vehicles;
- Ambulances;
- Fire trucks;
- Police vehicles;
- Taxis;
- Rental cars; and
- Uber/Lyft/Rideshare, etc.
This effectively means that a significant percentage, perhaps more than 50% of Ontarians, will not have access to most benefits under the SABS.
At the time of declining the now optional SABS benefits, we assume that companies and government organizations with fleet policies will likely increase private coverages to benefit their named insureds and employees (collateral benefits plans, STD, LTD, etc.). As such, there will likely be an increase in profit for collateral benefits and LTD insurers, who appear to be the main beneficiaries of these SABS amendments.
This will be particularly true if the Ontario Government proceeds with their other 2024 Budget announcement to make automobile insurance policies primary to collateral benefits policies by amending sections 268(6) and 268(7) of the Insurance Act and s. 47 of the SABS – https://www.ontariocanada.com/registry/view.do?postingId=48193 – “The Ministry of Finance is seeking feedback on amendments to the Insurance Act, to: … 2. Require auto insurers to pay for medical and rehabilitation expenses for injuries sustained as a result of an auto accident before these expenses are paid under a supplementary health insurance plan”).
There are also considerations for what it means to be eligible for optional benefits and the strict criteria applied to qualify for optional benefits. Under s. 28 of the SABS, optional benefits are only available to:
- the named insured;
- the spouse of the named insured;
- the dependants of the named insured and of the named insured’s spouse; and
- the persons specified in the policy as drivers of the insured automobile.
In other words, most occupants (unless they are a listed driver, named insured, spouse or dependant) and all pedestrian claimants will not have access to optional benefits.
In the fleet policy example, the named insured is typically a numbered company. There is no spouse, there are no dependents, and there usually are no listed drivers on the policy. So, the only way for an insured person to receive optional benefits on a rare fleet policy with optional benefits will be if they are considered a “deemed named insured” under the s. 3(7)(f) SABS definition of “regular use”.
This necessarily means that a significant percentage of people involved in an accident in Ontario will not have access to income replacement benefits, non-earner benefits or caregiver benefits, as well as other SABS benefits, to help them recover from their injuries, re-integrate into society and re-enter the workforce, without any “choice” in the matter. Instead, they will have to wait for the outcome of their tort claim (if they have one) which is usually many years after their accident.
Key Takeaways
The bottom line? The SABS amendments will likely increase auto insurance premiums in Ontario, ensure that a significant portion of Ontarians do not have access to necessary benefit coverage, and improve shareholder returns for collateral benefits and LTD insurance carriers in Ontario. This will also likely place increased pressure on OHIP-based medical care, further push for privatization of healthcare in Ontario, and worsen the poverty gap for most vulnerable Ontarians.
The only positive thing about these changes? They will not go into effect until July 1, 2026, and there is still time for the Ontario Government to engage in meaningful consultation with stakeholders to avoid potentially catastrophic results for the Province.
By Jason Frost
With Ontario Regulation 383/24 (https://www.ontario.ca/laws/regulation/r24383), the Ontario Government has amended the SABS for policies issued after June 30, 2026, to remove many of the previously standard SABS benefits for most persons injured in an accident on Ontario.
The impact of these changes may be catastrophic.
The Amended Regulation Will Likely Harm Insureds, Auto Insurers, and the Province
Starting July 1, 2026, named insureds in Ontario may decline to purchase optional benefits for most benefits under the SABS (parts II, IV, V and VI), including:
One practical consequence that immediately leaps to mind is that many insureds who do not have access to an income replacement benefit may struggle to rehabilitate themselves and re-enter the workforce in a timely way. Alternatively, they may try to not take any time off work and not obtain timely rehabilitation in the first few weeks following an accident.
In either scenario, it seems likely that increased risk of damages will be passed on to a related tort claim, including higher past and future loss of income claims, past and future care costs, and higher PJI. Also, tort defendants will no longer have access to weekly benefit s. 44 Insurer Examination reports within the first 1 – 3 years after an accident produced pursuant to a discovery undertaking and instead will only be able to rely upon Defence Medical reports completed 4 – 6 years after an accident. This too, will increase the tort payouts.
Many amounts that would traditionally have been paid by the accident benefits insurer will now be paid by the insurer of the tort defendant, plus interest and costs (there are effectively no costs in the current LAT AABS dispute resolution system). As such, automobile insurance policy premiums are likely to increase, not decrease.
There are further systemic issues with these changes that will likely impact more than 50% of Ontarians (in this author’s practice experience, at least).
The historic purchase rate for optional benefits has been in the 2-8% range for most Ontario insurers (https://otlablog.com/how-many-people-actually-buy-optional-accident-benefits/). In the past 30 years, approximately 90% of Ontario consumers opted to purchase less expensive automobile insurance (such as the plaintiff in Godina v. Tripemco Burlington Insurance, 2013 ONSC 979 (CanLII, https://canlii.ca/t/fw2xb). There is no reason to expect that historic trend to change, particularly while consumers are trying to make ends meet while facing increased costs of living (the Consumer Price Index increased by 3.9% in 2023 – https://www.statcan.gc.ca/en/subjects-start/prices_and_price_indexes/consumer_price_indexes).
The most significant impact of the amended SABS will affect those without any choice: “insured persons” who do not have their own policy and who claim accident benefits under a fleet policy insuring a vehicle involved in the accident.
This includes all:
This effectively means that a significant percentage, perhaps more than 50% of Ontarians, will not have access to most benefits under the SABS.
At the time of declining the now optional SABS benefits, we assume that companies and government organizations with fleet policies will likely increase private coverages to benefit their named insureds and employees (collateral benefits plans, STD, LTD, etc.). As such, there will likely be an increase in profit for collateral benefits and LTD insurers, who appear to be the main beneficiaries of these SABS amendments.
This will be particularly true if the Ontario Government proceeds with their other 2024 Budget announcement to make automobile insurance policies primary to collateral benefits policies by amending sections 268(6) and 268(7) of the Insurance Act and s. 47 of the SABS – https://www.ontariocanada.com/registry/view.do?postingId=48193 – “The Ministry of Finance is seeking feedback on amendments to the Insurance Act, to: … 2. Require auto insurers to pay for medical and rehabilitation expenses for injuries sustained as a result of an auto accident before these expenses are paid under a supplementary health insurance plan”).
There are also considerations for what it means to be eligible for optional benefits and the strict criteria applied to qualify for optional benefits. Under s. 28 of the SABS, optional benefits are only available to:
In other words, most occupants (unless they are a listed driver, named insured, spouse or dependant) and all pedestrian claimants will not have access to optional benefits.
In the fleet policy example, the named insured is typically a numbered company. There is no spouse, there are no dependents, and there usually are no listed drivers on the policy. So, the only way for an insured person to receive optional benefits on a rare fleet policy with optional benefits will be if they are considered a “deemed named insured” under the s. 3(7)(f) SABS definition of “regular use”.
This necessarily means that a significant percentage of people involved in an accident in Ontario will not have access to income replacement benefits, non-earner benefits or caregiver benefits, as well as other SABS benefits, to help them recover from their injuries, re-integrate into society and re-enter the workforce, without any “choice” in the matter. Instead, they will have to wait for the outcome of their tort claim (if they have one) which is usually many years after their accident.
Key Takeaways
The bottom line? The SABS amendments will likely increase auto insurance premiums in Ontario, ensure that a significant portion of Ontarians do not have access to necessary benefit coverage, and improve shareholder returns for collateral benefits and LTD insurance carriers in Ontario. This will also likely place increased pressure on OHIP-based medical care, further push for privatization of healthcare in Ontario, and worsen the poverty gap for most vulnerable Ontarians.
The only positive thing about these changes? They will not go into effect until July 1, 2026, and there is still time for the Ontario Government to engage in meaningful consultation with stakeholders to avoid potentially catastrophic results for the Province.