Starting July 1, 2026, in Ontario and Jan. 1, 2027, in Alberta, significant provincial reforms will reshape auto insurance in Canada. These are not minor changes, but substantial structural overhauls aimed at reducing costs and giving consumers more control and responsibility over coverage choices — which means that a broker’s job of educating consumers has never been more important!
What’s Changing? A Look at Each Province’s Auto Reforms
In Ontario, accident benefits are shifting. Ontario’s Statutory Accident Benefits Schedule (SABS) moves to a modular model, with only three coverages remaining mandatory:
- Medical covers the costs for reasonable and necessary medical expenses resulting from a motor vehicle accident that are not otherwise covered by Ontario’s public health system (OHIP)
- Rehabilitation covers the costs for ongoing treatment and services that help an injured person recover physically, psychologically, and functionally after an accident.
- Attendant care covers the costs for personal assistance when an injured person is unable to perform essential daily living activities independently due to accident‑related injuries.
All other benefits, such as income replacement, non-earner, caregiver, student aid, funeral, visitor expenses, etc., become optional add-ons. And the definition of “covered persons” for optional accident benefits will be amended to include only the named insured and their spouse, dependents of the named insured and their spouse, and any specified drivers listed on the insurance policy.
Additionally, Ontario is shifting to a first-payer system. Auto insurers will become the primary source of medical and rehab benefits, ahead of private health plans.
In Alberta (Bill 47), a care-first model will be established. With this, there will be two categories of benefits: income replacement benefits and recovery benefits. Those core benefits are as follows:
- Medical and rehabilitation, which is unlimited, essential care for all involved (drivers, cyclists, pedestrians, etc.), for all reasonable and necessary expenses.
- Income replacement up to 90% of net income, capped at $125,000, with consideration given to retirees, part-time/temporary workers, students, etc.
Why Are Canadian Governments Imposing These Reforms?
Canadian governments are introducing these reforms primarily to address rising auto insurance premiums, which have been driven by litigation costs, expensive vehicle repairs and fraud. Consumers have expressed dissatisfaction with the current system due to its complexity, lack of customization and confusion around coverage.
A key goal is to reduce legal costs by limiting court involvement in injury claims. Alberta’s care-first model alone is expected to cut approximately 20% of costs. Additionally, reforms aim to control inflation and prevent overlapping charges. For example, Ontario’s first-payer model helps reduce duplicate billing between auto insurers and private health or benefits plans. Fraud mitigation is another major focus, with modular benefits and stricter frameworks designed to curb staged claims and inflated coverage abuse.
How Will These Changes Impact Brokers and Agents?
Brokers and agents will need to ensure that clients understand the modular benefit packages in Ontario or the care-first model in Alberta. Compliance requirements will also change, requiring updates to forms, disclosures and renewal processes. Brokers should consider implementing scenario tools for quoting, as well as audit trails and consent records to ensure transparency and efficiency.
Client education will be essential. Brokers must clearly explain the risks of opting out of certain benefits and document all advice and communications thoroughly. Additionally, brokers with cross-border clients or U.S. agents serving Canadian drivers must understand provincial differences, particularly Alberta’s care-first approach and Ontario’s no-fault model.
How Should I Prepare?
- Education and Training: Education and training should be prioritized. In Ontario, brokers can access free accredited programs starting January 2026 through organizations like the Insurance Brokers Association of Ontario (IBAO), The Ontario Mutual Insurance Association (OMIA) and the Insurance Institute of Canada (IIC). In Alberta, brokers must understand the Bill 47 timeline and the care-first model.
- Process Readiness: Ontario brokerages must update client-facing documents and forms, such as the OPCF 47R – Optional accident benefits coverage and priority of payment form and implement system flags for mandatory versus optional coverages. In Alberta, brokers must learn new claims processes, dispute mechanisms and serious-offence criteria.
- Tech Implementation: In Ontario, brokerages should consider integrating scenario tools to easily offer comparisons, and decide if a signature (digital or pen-to-paper) will be required as confirmation when coverages are declined.
- Client Outreach: Should include preparing renewal communication templates and determining if additional customer education is desired (i.e., hosting seminars, updating websites, providing information via newsletter or eblast).
- Risk Management: Brokerages should implement audits and compliance reviews to ensure that new requirements and workflows are being followed.
It’s important to note that these reforms do not mean coverages will be removed at renewal; all policies will renew with their existing coverages and limits unless changes are requested. But even so, it is evident that Canada’s auto insurance landscape is entering a transformative phase. Ontario’s modular benefits system and Alberta’s care-first no-fault model mark significant policy shifts.
For brokers, proactive adaptation through training, system preparation and client engagement is essential. Brokers who embrace the change will not only remain compliant, but also deliver strategic value amid growing competition and evolving consumer expectations.