Ontario's July 1, 2025 auto insurance reforms mark the most sweeping rollback of no-fault benefits in a generation, stripping nine standard coverages from the Statutory Accident Benefits Schedule (SABS) and forcing injured Ontarians to pursue tort litigation for losses that were once covered automatically. Thomson Rogers partners Darcy Merkur and Robert Ben, along with associate Allahnah Karmali, unpack what the changes mean for claimants, brokers, and personal injury lawyers. The reforms continue a 30-year pattern of benefit erosion: standard non-catastrophic coverage has fallen from $172,000 in 1996 to $65,000 today, a figure Merkur calculates represents just 20 percent of its inflation-adjusted value. Pedestrians, transit riders, and anyone without a direct insurance policy face the sharpest cuts, since optional top-ups are unavailable to them. For law firms, the new regime demands faster filing timelines, earlier defence medical examinations, and a litigation-first mindset that the Thomson Rogers team says it is already building into its practice.
Ontario is eliminating nine previously standard benefits from its Statutory Accident Benefits Schedule (SABS), leaving only medical, rehabilitation, and attendant care coverage as mandatory. Benefits being cut include visitor expenses for immediate family members, automatic income-replacement benefits, funeral benefits of around $6,000, and death benefits ranging from $10,000 to $25,000. Ontarians must now purchase the dropped benefits separately from an optional, à-la-carte menu of add-on premiums, meaning anyone who does not actively opt in and pay extra will lose coverage they previously received without any additional cost.
Ontario auto insurance benefits for non-catastrophic injuries have been cut repeatedly since 1996, when the combined standard coverage stood at $172,000. A 2010 regulatory change halved that amount to $86,000, and a 2016 change reduced it further to $65,000. That same 2016 sweep cut catastrophic-injury benefits from $2 million to $1 million. Darcy Merkur of Thomson Rogers calculates that the original 1996 benefit would be worth approximately $320,000 in today's dollars after adjusting for the Consumer Price Index, meaning current coverage represents just 20 percent of its inflation-adjusted value, a shortfall of more than $255,000.
The approximately 40 percent of accident benefit claimants who hold no direct insurance policy of their own are hit hardest by Ontario's July 1, 2025 reforms, because the changes are not optional for them. This group includes pedestrians, TTC riders, and members of households that do not own a car. Even where a driver purchases optional benefits, that coverage extends only to the named insured, their spouse, dependants, or listed drivers, leaving non-insured claimants with no fallback regardless of what the at-fault driver chose to purchase.
Ontario's July 1, 2025 auto insurance reforms will push more injured people into the tort system to recover losses once covered automatically by SABS. Allahnah Karmali of Thomson Rogers warns this creates fewer statutory set-offs and potentially higher exposure for future income loss on the tort side, while also lengthening recovery timelines, since court judgments can take years to secure. A further consequence is the loss of section 44 insurer examination reports: without a live benefits dispute to trigger them, those independent medical assessments will no longer exist, forcing defendants to commission their own defence medical examinations earlier and at greater cost.
Thomson Rogers is moving to file lawsuits much faster than the traditional one-year mark following the Ontario auto insurance reforms. Darcy Merkur says expedited lawsuits will become the norm, with the goal of reaching judgment and securing compensation as quickly as possible, since five-year timelines are no longer viable for clients who have lost income-replacement coverage. Robert Ben notes the firm has adapted its case strategy through every major round of Ontario auto insurance reform and expects to continue achieving strong results for clients within the new framework.
Insurance brokers in Ontario owe clients a duty of good faith that requires them to explain available coverage, flag material exclusions, and alert customers to gaps in protection created by the July 1, 2025 reforms. Robert Ben of Thomson Rogers cautions that advising clients on optional benefits must go beyond a box-checking exercise, and brokers who ignore guidance do so at their own peril. The Financial Services Regulatory Authority of Ontario (FSRA) has released a communications toolkit for brokers and insurers; Ben says meaningful use of that toolkit could insulate brokers from negligence claims, though outcomes will always be fact specific.
Accident victims in Ontario who do not purchase optional income-replacement benefits will have nothing to bridge the financial gap while their tort claim works through the courts. Darcy Merkur warns this will push injured people to return to work prematurely and increase reliance on OHIP and government-funded programs such as employment insurance. Merkur predicts many drivers will choose cheaper coverage to save a few dollars without anticipating how badly things can go wrong, leaving them exposed at exactly the moment they need support most. Visitor expense claims alone have exceeded $100,000 in a single case at Thomson Rogers, illustrating how significant these losses can be.
