On July 1, 2026, Ontario implemented a reform (the Ontario Reform) under the Insurance Act (Ontario) (the Ontario Act) by amending the Statutory Accident Benefits Schedule, O. Reg. 34/10 (the SABS), to make various automobile accident benefits optional1. Six months later, on January 1, 2027, Alberta will replace its tort-based regime with a no-fault system under the Automobile Insurance Act (the Alberta Act, formerly Bill 47), introducing what the province calls the “Care-First” model (Care-First, and together with the Ontario Reform, the Reforms)2.

Although both provinces share the same objective, which is controlling the cost of bodily-injury claims and stabilizing premiums, they pursue it through opposite means. Ontario expands consumer choice by allowing drivers to purchase less coverage, while Alberta mandates a broader, standardized benefits package and removes most access to the courts. This article outlines the Reforms’ objectives, their legislative basis, and potential impacts of each approach.


I. The Ontario reform: From mandatory to optional benefits
a. Objectives

Ontario frames the Ontario Reform as a consumer-choice measure rather than an affordability measure. It is described as “transformational” because Ontario is the first province to offer such choice. However, savings for drivers are expected to be modest.

The Ontario Reform requires insurers to submit filings to the Financial Services Regulatory Authority of Ontario (the FSRA) for review before offering the new optional coverages. A related change establishes auto insurance as the primary source of coverage for accident-related medical and rehabilitation treatment, taking precedence over employer group benefits or private health insurance.

b. Legislative framework and core principles

O. Reg. 383/24, made on October 10, 2024, under the Ontario Act, establishes the changes comprising the Ontario Reform. It converts the benefits in Parts II, IV, V and VI of the SABS into optional benefits for any policy entered into or renewed on or after July 1, 2026. Medical, rehabilitation and attendant-care benefits remain compulsory3.

The benefits becoming optional (the Optional Benefits) comprise income replacement, non-earner, caregiver, lost educational expenses, visitor expenses, housekeeping and home maintenance, damage to clothing and similar items, death and funeral benefits. Existing policies renew with their current coverage unless the named insured agrees in writing to changes. Critically, once purchased, the Optional Benefits apply only to named insureds, their spouses, dependents and listed drivers4.

c. Potential impacts on consumers and market participants

The increased flexibility under the Ontario Reform carries a risk of underinsurance for consumers and third parties, as drivers who decline the Optional Benefits to reduce premiums may face coverage gaps. Insurance brokers should therefore receive appropriate training on these new options and remain attentive to their clients’ specific needs and circumstances when recommending insurance products, including by considering their existing coverage.

Insurers may offer the Optional Benefits individually or in bundled packages, with coverage limits tailored to evidence of consumer needs. They may also introduce new coverages, coverage limits, and eligibility criteria. Insurers are not restricted from offering optional benefits beyond those listed in the SABS regulation, provided such benefits have been filed with and approved by the FSRA, opening the door to innovative product design.

However, initial SABS optionality filings are expected to be premium revenue neutral, measured against the latest in-force data, and bundled coverage pricing should be equal to or less than the sum of the individual optional coverages.

The Ontario Reform could drive a migration of claims into the court system. Third parties face the greatest exposure because the Optional Benefits attach only to named insureds and their households; pedestrians, cyclists, and public-transit riders fall outside the driver’s optional coverage structure entirely.




II. The Alberta reform: The Care-First model
a. Objectives

Alberta’s stated rationale centres on cost savings and market sustainability. According to the government’s Care-First intentions paper, litigation accounts for approximately 30 percent of bodily-injury claim costs, the average bodily-injury claim rose from about C$91,000 in 2020 to nearly C$180,000 in 2024, and average premiums climbed roughly 165 percent over three decades, reaching C$1,703 in July 2024, the second highest in Canada after Ontario. By eliminating most litigation, the province anticipates savings for drivers and aims to attract insurers that withdrew from the market under premium caps.

b. Legislative framework and core principles

Care-First is established by the Alberta Act, which passed third reading in May 2025 and received royal assent the same month. It applies to accidents occurring on or after January 1, 2027. The Alberta Act notably bars tort actions or proceedings for bodily injury or death and makes benefits payable “regardless of who is at fault for an accident.”

Limited exceptions (the Tort Bar Exceptions) permit suits where the at-fault driver is convicted of prescribed Criminal Code or Traffic Safety Act offences, or for pecuniary losses exceeding benefit limits. Benefit disputes move from the courts to a new Alberta Automobile Care-First Tribunal (the Tribunal), which is funded by private insurers, cannot award costs, and whose decisions are final subject only to judicial review. Benefits are initially benchmarked to Manitoba’s no-fault system; for example, medical and rehabilitation coverage becomes unlimited until maximum medical recovery, replacing the current limit of C$50,000 over two years5.

c. Potential Impacts on consumers and market participants

Care-First’s principal trade-off for consumers is the loss of access to the court system for most potential claims. In contrast to the Ontario Reform, however, Care-First extends benefits to injured pedestrians and cyclists through the involved driver’s policy6.

Insurers may offer higher coverage levels through endorsements and provide options to purchase additional income replacement or other benefits. Additionally, insurers stand to benefit from government-provided standardized tools, including evidence-based care and treatment programs, a best-practice case management model and accompanying guidelines, and health care provider reporting templates, which are intended to support decision-making consistency across insurers and enable consistent consumer experience.

Care-First also expands the role of insurers. Because the reform may broaden accident benefits and largely removes the litigation pathway, carriers will assume greater responsibility for managing claimant recovery, including informing claimants of available benefits, assisting with claims, and actively managing cases from initiation to closure. Whether the reform will lower costs for insurers will depend on the benefits ultimately granted per claim, the volume of Tribunal proceedings, and whether litigation cost savings offset the expanded scope of insurer obligations.




III. Comparison of the reforms

Feature
Ontario reform (O. Reg. 383/24)
Alberta reform (the Alberta Act / Care-First)

Effective date
July 1, 2026
January 1, 2027

Underlying model
Private market; tort retained, accident benefits made optional
Private market; no-fault

Core change
Various accident benefits move from mandatory to optional
Tort actions barred in most cases; benefits payable regardless of fault

Mandatory coverage
Medical, rehabilitation, attendant care
Defined statutory benefits; medical/rehab unlimited up to maximum medical recovery

Right to sue
Retained
Barred, subject to the Tort Bar Exceptions

Dispute forum
Courts / Licence Appeal Tribunal
Alberta Automobile Care-First Tribunal (insurer-funded)

Third-party (pedestrian/cyclist) coverage
Narrowed; Optional Benefits limited to named insured’s household
Medical/rehab extended via involved vehicle’s policy

Direction of coverage
Toward less (opt down to save)
Toward standardized statutory benefits

 
 
 




IV. Practical considerations

Both Reforms share the goal of controlling bodily-injury claim costs and stabilizing premiums, but they pursue it through opposite means. Ontario’s opt-down approach decentralizes risk to the individual driver by making certain accident benefits optional, potentially lowering premiums for those willing to accept reduced coverage. Alberta’s Care-First model centralizes risk in a standardized, insurer-administered no-fault scheme that removes most court access in favour of defined statutory benefits.

In practice, insurers, brokers, and counsel should: (i) review policy wordings, endorsements, and renewal processes against the applicable Reform; (ii) ensure point-of-sale and renewal disclosures clearly explain the consequences of declining the Optional Benefits in Ontario and the removal of tort rights and role of the Tribunal in Alberta; (iii) anticipate shifts in litigation patterns, particularly tort spillover in Ontario; and (iv) monitor forthcoming Alberta regulations, which will prescribe benefit levels, catastrophic-injury definitions, and the Tort Bar Exceptions.

Our insurance team is available to assist insurers, brokers, and counsel in navigating these reforms.

The authors would like to thank Pamela Kouretas, student, for her contribution to preparing this article.