With all the talk about Ontario's new à la carte auto insurance model and optional benefits, you might wonder what will still be required. The good news is that core mandatory coverages remain firmly in place. Here's your complete guide to what every Ontario driver must still carry after July 1, 2026.
The Four Pillars of Mandatory Coverage
Ontario law requires all drivers to maintain four fundamental types of coverage. These are NOT changing with the 2026 reforms:
1. Third-Party Liability Coverage
This is arguably the most important coverage you carry. It protects you if you cause an accident that injures others or damages their property.
- Legal minimum: $200,000
- Recommended minimum: $1,000,000 or more
- What it covers: Bodily injury and property damage to others caused by you
Why it matters: Lawsuits from serious accidents can easily exceed $200,000. If you cause an accident with damages beyond your coverage limit, you're personally responsible for the difference. Most experts recommend at least $1 million in coverage, and many suggest $2 million.
2. Statutory Accident Benefits (Basic Level)
Even with the à la carte changes, a basic level of accident benefits remains mandatory. What's changing is that enhanced benefits above this basic level may become optional.
The mandatory basic accident benefits include:
- Medical and rehabilitation benefits: Basic coverage for treatment after an accident
- Income replacement: A basic level of income replacement if you can't work
- Death and funeral benefits: Basic amounts for beneficiaries
Important: While you can opt out of enhanced levels under the new system, you cannot opt out of basic accident benefits entirely. This ensures all Ontarians have some protection.
3. Direct Compensation - Property Damage (DCPD)
DCPD coverage pays to repair or replace your vehicle when you're in an accident that wasn't your fault.
- What it covers: Damage to your own vehicle when another driver is at fault
- How it works: You claim through your own insurer, not the at-fault driver's
- Why it's mandatory: It's part of Ontario's no-fault system that speeds up claims
This coverage is essential because in Ontario's no-fault system, you deal with your own insurer even when someone else causes the accident.
4. Uninsured Automobile Coverage
This protects you if you're hit by an uninsured driver or a driver who flees the scene (hit-and-run).
- What it covers: Injuries and damages caused by uninsured/unidentified drivers
- Why it's essential: Despite insurance being mandatory, some drivers ignore the law
- Coverage amount: Up to $200,000 for property damage from uninsured drivers
What Cannot Be Removed From Your Policy
To be crystal clear, here's what you cannot opt out of, no matter what:
| Coverage Type | Status After 2026 | Minimum Required |
|---|---|---|
| Third-Party Liability | Mandatory | $200,000 |
| Basic Accident Benefits | Mandatory | Basic statutory level |
| DCPD | Mandatory | Required |
| Uninsured Automobile | Mandatory | $200,000 property damage |
Penalties for Driving Without Insurance
Ontario takes mandatory insurance seriously. If you're caught driving without valid insurance:
- First offence: Fine of $5,000 to $25,000
- Subsequent offences: Fine of $10,000 to $50,000
- Additional penalties: Licence suspension, vehicle impoundment
- Long-term impact: Difficulty obtaining insurance, much higher rates
Optional Coverages (Still Recommended)
While not mandatory, these coverages are highly recommended for most drivers:
Collision Coverage
Pays to repair your vehicle after an at-fault accident. Without it, you'd pay out of pocket for your own car repairs.
Comprehensive Coverage
Covers non-collision damage like theft, vandalism, fire, or weather damage. Essential for protecting your vehicle investment.
Increased Liability Limits
While $200,000 is the minimum, most experts recommend $1-2 million in liability coverage for adequate protection.
Enhanced Accident Benefits
Even though they may become optional in 2026, enhanced accident benefits provide important additional protection. Consider your personal circumstances carefully before opting out.
Why Mandatory Coverage Exists
Ontario requires minimum auto insurance coverage to:
- Protect accident victims: Ensure injured parties can receive compensation
- Prevent financial devastation: Stop accidents from bankrupting at-fault drivers
- Maintain the insurance system: Keep the pooled risk system functional
- Reduce uncompensated accidents: Minimize societal costs of uninsured crashes
The Bottom Line
While Ontario's 2026 changes will give you more flexibility with certain accident benefits, the core structure of mandatory auto insurance remains unchanged. Every driver will still need:
- Third-party liability ($200,000 minimum)
- Basic accident benefits
- Direct compensation - property damage
- Uninsured automobile coverage
The changes primarily affect enhanced accident benefits, giving you the option to customize that portion of your coverage based on your other insurance and personal circumstances.
Want to ensure you have the right coverage? Get a free quote and review your options with an insurance expert.