If you live and drive in Ontario or Alberta, you likely know how fast auto insurance premiums have been rising. Now, both provinces are introducing changes to try to contain costs.

Alberta’s reforms don’t take effect until Jan. 1, 2027, so I’ll flag what drivers there need to know closer to that date. Today, I want to talk about Ontario, where new rules kick in on July 1.

If you are in Ontario, these changes could have significant implications for you and your family – whether you have a car or not.

Starting next month, a number of accident benefits that are currently mandatory in every auto insurance policy will become optional. The province is keeping a minimum standard of coverage that will include medical expenses, rehabilitation services and attendant care – think, the cost of paying for someone to help bathe and get dressed after a serious injury in an accident.

Everything else becomes extra. That includes coverage for home maintenance and repairs, funeral costs and caregiver benefits, which pay for someone to look after your children or elderly relatives while you recover. Crucially, it also includes benefits that provide some temporary financial assistance if you become unable to work, go to school or carry on with your normal life.

The government of Premier Doug Ford argues that a lot of those benefits are unnecessary or redundant for many people. If you don’t have dependants, for example, you don’t need caregiver benefits. And if you have disability insurance through work, you may not want to pay for income replacement coverage through your car policy.

Fair enough. But don’t expect your premium to shrink much if you reduce your coverage. The Insurance Brokers Association of Ontario has estimated that the savings would likely amount to $100 a year at most. That’s a 5 per cent discount on the average Ontario auto premium of around $2,000 a year.

As of July 1, drivers with an existing policy will be able to opt out of any or all of the optional benefits. Those shopping for a new policy will have to opt in if they want elective coverage.

Is it worth it to give up thousands if not tens of thousands of dollars in coverage for the sake of saving $5 to $10 a month? That’s one question to ask yourself.

But there’s more to these changes. I talked to David Mayer, director of insurance and underwriting at financial products comparisons site Rates.ca, about three little-known issues that drivers and non-drivers should know about.

For drivers: What happens if you lose or leave your job?

Right now, every auto insurance policy provides up to $400 a week in income replacement benefits for up to two years. It’s not much, but it’s something.

If you decide to drop this coverage because you have workplace disability benefits, you can still add it back on if you lose your job, decide to go freelance or move to a new job that has a waiting period before your benefits kick in, Mr. Mayer said.

The question is whether you’ll remember to do so. If you don’t and you are hurt in a car accident, you may find yourself relying exclusively on government assistance such as Employment Insurance sickness benefits or the Canada Pension Plan disability benefit for support.

Also important to know: The new rules mandate that auto insurance pay first for the cost of medical and rehabilitation expenses caused by a car accident, before you have to tap your employer or private insurance coverage.

The change allows you to use up less of your workplace benefits and potentially be able to use more of them for other emergencies, Mr. Mayer said.

For drivers: What about your passengers?

If you do nothing, come July 1 your coverage will continue with the same benefits and limits. But the way your coverage extends to other people will change.

Under Ontario’s no-fault insurance system, accident benefits automatically flow to anyone injured in a car crash. This will continue to be the case.

Under the new rules, though, your policy’s optional benefits will only extend to you (the named insured), your spouse, your dependants and any other drivers named on the policy. Everyone else who doesn’t have their own optional coverage will get only medical, rehabilitation and attendant-care benefits.

This matters for pedestrians and cyclists, as I write below. But it also matters for the people travelling in your car.

One tricky scenario Mr. Mayer raised: What happens if you get into a car accident, and one of the passengers is your adult child who doesn’t drive? If they don’t live with you, but you still somewhat support them financially, are they still your dependant under your policy?

That’s a grey area that will likely lead to legal disputes, according to Mr. Mayer. “I don’t think the government has given crystal clear guidance on that.”

For anyone without auto insurance coverage

If you’re an uninsured pedestrian, cyclist, scooter rider, or e-bike user, you’ll be left with bare-bones coverage. If you’re badly injured in a car accident, you may have to sue the at-fault driver for income loss and other damages, Mr. Mayer said.

This scenario is especially dire if you don’t have workplace benefits. If you have a driver’s licence but don’t have your own vehicle, one option is taking out a non-owner auto insurance policy, Mr. Mayer said.

Another is taking out an individual disability insurance policy, but that coverage tends to be pricey.

“This is definitely one of the sharpest risks of the new system,” Mr. Mayer said.