Drivers could soon opt out of some auto insurance: Ontario budget

Drivers could soon opt out of some portions of auto insurance and select from a wider variety of coverage options to lower their car insurance premiums, the Doug Ford government revealed in its budget.

The reforms are central feature of the government's 2024 budget tabled Tuesday and will provide a wider variety of more affordable options for drivers, improved access to benefits and create a more "modern" auto insurance system, the government says.

CBC News first reported that the province intended to make changes to auto insurance ahead of the budget on Monday. 

"We are moving forward with auto-insurance reforms that would provide more choice and flexibility to drivers in order to keep their premiums more affordable," said Finance Minister Peter Bethlenfalvy as he tabled the budget in the legislature.

Mandatory auto insurance will continue to apply to "medical, rehabilitation and attendant care benefits," according to the budget, while all other benefits would be optional. The government has not said when the changes might take effect.

A senior government official said Tuesday the province remains unclear on what impact the reform will have in Ontario and on average interest auto insurance premiums because it will depend on what individual drivers choose to do with their coverage.

Changes aim to reduce paperwork, red tape: ministry

The Ford government is also proposing to make auto insurance companies pay for medical and rehabilitation benefits after an accident – before extended health care plans cover the costs. This policy would apply to all vehicle accidents regardless of the injuries sustained, it said.

According to the budget, this will help "reduce paperwork and red tape for patients and their health care providers.

"This is something that we are committed to because … we want insurance to be affordable for many," Bethlenfalvy told reporters at a news conference Tuesday.

The reforms won't necessarily lower auto insurance rates, Bethlenfalvy noted.

"I don't think this is where we have any sort of specific numbers in terms of the rate of increase or a decrease," he said.

"What we're really focused on is making sure that we provide as much choice and convenience to drivers," he added.

The government is also trying to encourage innovation and competition in the market, which could help on prices, Bethlenfalvy said, adding that the reforms would create a "robust level of coverage at reasonable prices." 

Average premiums have risen by less than 10 per cent since 2019, according to the Financial Services Regulatory Authority of Ontario.

Auto insurance rates have become a hot political issue in Ontario over the years. Official numbers from the provincial regulator, cited by the auditor general, show premiums have risen higher than inflation since 2022.

Opposition NDP concerned about 'risk' from opt-out

The previous Liberal government of Kathleen Wynne promised in 2013 to reduce auto insurance rates by 15 per cent within two years, but failed to hit that target.

The Ford government's 2019 reforms increased choice by allowing insurance companies to offer drivers new types of discounts. Those options included lower premiums for drivers who agree to claim benefits only through an insurance company's "preferred providers" of auto repair or health care services.

Effective Jan. 1, 2024, Ontario began allowing drivers to opt out of previously mandatory coverage called "direct compensation — property damage," which reimburses drivers for damage to their own vehicle in an accident that is not their fault.

Bethlenfalvy said the province is also "finishing the job" of automating the licence plate renewal process by scrapping licence plate renewal fees and plate stickers.

The province says its proposed permanent freeze on driver's licence fees is projected to save drivers an estimated $66 million over the next five years. The freeze, which was implemented by the government in 2019, has saved drivers roughly $22 million so far. 

Ontario NDP Leader Marit Stiles suggested 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 that this is going to force Ontarians who are looking for more affordable options frankly to take on additional risk that they shouldn't be forced to take on," Stiles told reporters at a news conference at the legislature Tuesday.

"At the end of the day, it's going to be Ontarians that suffer."

The Progressive Conservatives have also announced auto insurance reforms in previous budgets, and premiums have actually gone up, Stiles noted.

Police to get $49M to tackle auto theft, organized crime

The budget also addressed one of the major factors contributing to the rise in car insurance premiums – the relentless scourge of auto theft all across the province.

In response, the province has earmarked $49 million in funding to help police services across Ontario crack down on rampant auto theft and dismantle organized crime networks. 

WATCH | Ontario driver frustrated after dealing with 3 car thefts: 

This North York man has had three cars stolen in the last year

1 year ago

Duration 1:00

Mitchell Levine’s dealership told him to remove an anti-theft device he installed in his Lexus — but when he did, it was stolen from a TTC parking lot. It’s the third time in the last year Levine and his wife have had a vehicle stolen.

An additional $46 million will also be invested over three years to launch a new air support program, according to the budget. That includes the purchasing of four new helicopters that will be used by police services in the Greater Toronto area to increase patrols and improve response times to major incidents.

"These helicopters will help police crack down on auto theft, as well as street racing, carjacking and impaired driving, while assisting in apprehending violent criminals and locating missing persons," Bethlenfalvy said in the legislature Tuesday.