15 Apr Ontario Optional Benefits Model Changes: Effective July 1, 2026
Ontario’s auto insurance regime is undergoing a significant structural shift.
Effective July 1, 2026, the Statutory Accident Benefits Schedule (SABS) moves from a largely standardized system to an “optional benefits” model.
At its core, medical, rehabilitation, and attendant care benefits remain mandatory, but all other accident benefits become optional.
These changes sound simple, but the downstream consequences, particularly for mediation and tort exposure, are anything but.
There is likely to be additional pressure on the tort system as some plaintiffs will seek to claim damages previously provided as no-fault benefits by the Statutory Accident Benefits Schedule (SABS).
In this post, Logan Cooper outlines the changes, explains how they shift the balance between the “safety net” approach of accident benefits to the recovery approach of litigation, and offers insight into what this means for mediation.
What Is Actually Changing?
No fault motor vehicle insurance was initially conceived as a public policy designed to provide injured people with quick access to financial support while they recovered from their injuries. Although tort claims may still be made against an at-fault driver for losses beyond benefit limits, these claims often take more time to resolve. In the interim, injured persons are required to pay out of pocket when they have exhausted their accident benefits.
Historically, Ontario’s SABS offered a relatively predictable baseline of no-fault support: income replacement, caregiver benefits, housekeeping, and more.
As of July 1, 2026:
-Income Replacement Benefits (IRBs): optional
-Non-earner benefits: optional
-Caregiver and housekeeping benefits: optional
-Death and funeral benefits: optional
In practical terms, Ontario is shifting to an à la carte system, where insureds must actively opt in and pay for income protection and other financial supports.
Optional benefits are also generally limited to the named insured, their spouse, dependents, and listed drivers People injured in motor vehicle accidents who are not covered by their own insurance policy or that of a family member will no longer be able to access these benefits through SABS.
What This Means for Mediation and Litigation
1. Less Collateral Benefits = Greater Tort Exposure
Accident benefits have historically acted as a buffer absorbing income loss and certain expenses, regardless of fault.
With those benefits now optional, it is reasonable to anticipate larger damages claims and less room for set-offs.
-More plaintiffs will arrive at mediation without income replacement or caregiver support
-Claims for past income loss and future care will carry greater weight
-The tort system becomes the primary avenue for recovery
2. Real Pressure on Injured Plaintiffs
Without IRBs or comparable disability coverage, a new layer of urgency and vulnerability will be introduced into negotiations.
-Injured individuals may face immediate financial pressure
-Return-to-work timelines may be driven by necessity, not recovery
-Credibility battles at mediation may intensify (ability vs. necessity)
3. Increased Broker and Advisory Exposure
The optional model introduces a critical decision point at the time of sale or renewal. Given that many benefits can be removed for relatively small premium savings, the potential for errors and omissions claims against brokers is real:
-Did the insured understand what they were giving up?
-Was adequate advice provided?
-Were risks clearly explained?
4. Coverage Gaps for Non-Policyholders
One of the more underappreciated consequences of these changes is that pedestrians, cyclists, and passengers may not have access to optional benefits unless they are covered under a qualifying policy.
This creates scenarios where medical care is covered, but income replacement is not. That gap will inevitably surface in tort claims and at mediation tables.
5. Earlier and More Complex Disputes
With fewer built-in benefits, coverage disputes will arise earlier, priority and eligibility issues become more contentious, and plaintiffs may be pushed toward litigation sooner.
At the same time, there is a countervailing possibility. Greater uncertainty may drive earlier mediations, particularly where exposure is unclear.
One notable improvement is the subtle but important change in “first payer” status. Auto insurers will now act as the first payer for medical and rehabilitation benefits, eliminating the need to exhaust workplace or private plans first.
This may streamline some aspects of claims handling but it does not offset the loss of income-related protections.
Final Thoughts
The move to an optional benefits model is not just an insurance reform. It is a litigation reform by implication.
We should expect: more underinsured plaintiffs, greater reliance on tort recovery, and increased pressure on mediation to bridge widening gaps.
For counsel and claims professionals, the key takeaway is when baseline assumptions that have historically underpinned Ontario mediations are changing, strategies must change with them.
ABOUT THE AUTHOR
Logan Cooper joined the Cooper Mediation team in November 2017 and devotes 100% of her professional time to mediating at roster-like rates. She has mediated over 600 cases in the areas of personal injury, long-term disability, employment, and other insurance-related disputes. She has handled global mediations, cases with multiple parties, self-represented litigants and cases with complicated technical and interpersonal challenges. Logan has been inducted into the International Academy of Mediators (IAM). The IAM is an invitation-only organization.
Logan can be reached at logan@coopermediation.ca or (416) 726-1344.To schedule a mediation with Logan, visit: https://coopermediation.ca/logan-cooper-online-calendar/.