The Current Legislation
Statutory Accident Benefits are mandatory no-fault insurance benefits that are included in standard auto insurance policies in Ontario. They are often called “SABS” as they are fixed in regulation called the Statutory Accident Benefits Schedule (“SABS”). A primary purpose of the SABS is to provide benefits coverage to anyone injured in a car accident regardless of fault. Part II of the current SABS legislation mandates that automobile insurers include minimum benefit coverage for:
- income replacement benefits (a benefit which provides limited income to those who were working at the time of the accident and are unable to work for a period of time after the accident); and
- non-earner benefits (a benefit which provides a weekly allowance financial compensation to those who were not working at the time of the accident and are prevented from engaging in their usual pre-accident activities and lifestyle).
July 1, 2026, Amendments to PART II of the SABS
Under the guise of empowering Ontario drivers with more affordable options through enabling more consumer choice, the Ontario government has chosen to amend the SABS to allow standard auto insurance policies to make certain no-fault benefits, previously included in every Ontario automobile insurance policy fully optional. While optional benefits are not new to automobile insurance in Ontario, prior to the upcoming amendments to the SABS, the nature of optional benefits were such that a consumer could choose to pay a larger premium for enhanced coverages, rather than pay a lower premium for less or no coverage. Thid change means that certain SABS benefits will no longer be part of your policy, unless you pay for them.
The Amendments to Part II of the SABS allow insurers to make income replacement and non-earner benefits fully optional. Making these coverages optional may provide consumers with a lower insurance premium for those who do not add the coverages. Unfortunately, with the rising costs of living, many will feel that lowering their automobile insurance premium is an excellent way to reduce their fixed monthly costs.
How Will the Part II Amendments Affect Insurance Consumers?
Most consumers are unaware of what benefits are covered (and not covered) in their insurance policy. Many will shop for insurance based on “lowest premium cost” rather than “breadth/amount of coverage provided”. Often, the minimum coverage currently provided by the SABS is not enough to protect people who are seriously, but not catastrophically, injured in a motor vehicle accident. In the past, a proactive consumer could enhance their benefits to provide additional optional coverage. The amendments to Part II of the SABS represent the first-time consumers will be able to choose to decrease their coverage from previously established minimums (which were often not enough to replace an injured person’s weekly income, in the case of income replacement benefits).
Under Part II of the current SABS legislation, statutory minimum coverage for income replacement benefits and non-earner benefits protected consumers in search of the “lowest offered premium” from having no coverage for loss of income or non-earner benefits.
If insurance consumers choose insurance based on the “lowest offered premium”, they will likely find themselves without some of the coverages they need to protect themselves if they are involved in a motor vehicle accident. For instance, under the current legislation, if you earn more than $29,715 prior to becoming involved in a motor vehicle accident, you will typically receive $400 per week in non-taxable income replacement benefits if you are not able to return to work as a result of your accident-related injuries. Under the amended legislation, if you have chosen not to purchase the optional loss of income coverage, you will not receive any benefit from your automobile insurer to offset your inability to return to work. This means that unless you have disability coverage from work or elsewhere, you will not receive any income replacement benefits while you recover from your injuries.
How Will the PART II Amendments Affect Insurance Providers?
For insurers, the shift to optional income replacement, and non-earner benefits introduces new challenges. The mandatory coverage that was provided by the SABS was designed to provide consumers with the minimum protection for most losses related to injuries suffered in a motor vehicle accident. Insurers must be careful and thorough in how they communicate about these optional benefits. Any effort by an insurer to promote lower premiums and/or to encourage consumers to move away from their existing coverage will need to be clearly communicated to consumers in order for insurers to avoid potential litigation related to an insured’s reduction in coverage. The consumer will need to be told what will no longer be covered in exchange for the lower premium.
Takeaway
The amendments to Part II of the SABS, set to take effect on July 1, 2026, represent a significant change in Ontario’s automobile insurance industry. While the changes are designed – in theory – to provide more choice and affordability for the consumer, the removal of statutory minimum coverage for income replacement and non-earner benefits will likely result in a devastating post-accident realization that there is no coverage immediately available for any loss of income. For most who are not at fault, they will need to sue an at-fault driver for their loss of income. For those who are at fault in the accident, they will sadly have no income support at all. Keep this in mind if you are looking to save some money by opting for the “lowest offered premium”.
Parting Thought
It’s unwise to pay too much, but it’s worse to pay too little.
When you pay too much, you lose a little money – that’s all.
When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing it was bought to do
– John Ruskin – 19th century English poet
If you or a loved one has been injured in a motor vehicle accident and are concerned about the impact of these changes on your coverage, our Personal Injury team is here to help. We have the expertise to navigate the complexities of Ontario’s insurance laws and ensure you receive the benefits and compensation you deserve. Contact us today to schedule a consultation and protect your rights.
Soloway Wright LLP is a community-based law firm with offices in Ottawa and Kingston. With over 75 years of experience, our team of over 40 specialty lawyers in Ottawa and Kingston offer a dynamic blend of knowledge and experience to clients requiring assistance with Business Law, Commercial Leasing, Commercial Litigation, Condominium Law, Construction Law, Corporate Finance & Securities, Employment, Labour & Public Law, Workplace Investigations, Environmental Law, Estate Planning & Administration, Insurance Law, Medical Malpractice, Personal Injury, Municipal, Land Development & Expropriation, Real Estate & Development, and Tax Law matters. Our goal is to bring your legal issue to an effective, affordable, and successful conclusion.
DISCLAIMER: This article is for general information purposes only and is not (and should not be construed as) legal advice. The information contained herein summarizes only certain aspects of the subject matter and is not a comprehensive review of applicable law. All of the foregoing is subject to legal and accounting advice based on the particular circumstances of each potential client.
