As of July 1, 2026, Ontario introduced one of the most significant changes to accident benefits in over a decade. For nonprofit organizations, these changes go beyond insurance mechanics, directly affecting employees, volunteers and the individuals they support.
At the centre of this reform is a move toward greater choice in coverage. While this may offer flexibility, it also introduces new risks and responsibilities that nonprofit leaders must actively manage. For a detailed breakdown of the Ontario auto industry Statutory Accident Benefits (SABS), including coverage limits and optional benefits, read our dedicated page here.
What's changing in Ontario?
The Ontario government is shifting from a model of comprehensive default coverage to one that emphasizes customization.
As of July 1, 2026:
- Medical, rehabilitation and attendant care benefits remain mandatory
- All other accident benefits become optional, including:
- Income replacement
- Caregiver and dependent care benefits
- Non-earner benefits
- Death and funeral benefits
- Housekeeping and home maintenance
With these optional benefits no longer being mandatory, some policyholders will elect to delete these coverages. This means not all individuals involved in an accident will have access to the same level of protection.
A shift in responsibility: Why nonprofits need to pay attention
Historically, accident benefits provided a strong, standardized safety net. Under the new model, protection becomes dependent on individual coverage decisions. For nonprofits, this creates three critical challenges:
- Greater variability in protection across employees and service users
- Increased reliance on organizational policies and processes
- Potential for unexpected coverage gaps
These challenges are amplified in environments where organizations transport staff, clients or volunteers as part of daily operations.
The nonprofit impact: Where new risks are emerging
1. Reduced protection for vulnerable individuals
Under the new rules, optional benefits apply only to:
- The named insured
- The spouse and dependents of the named insured
- Listed drivers on the policy
This can create a significant issue for nonprofit organizations.
Individuals receiving services (such as those in developmental services, mental health programs or community support) may only have access to mandatory medical coverage, unless they are deemed dependent on the organization.
In practical terms, this means loss of access to:
- Income replacement
- Caregiver benefits
- Death and funeral coverage
For many nonprofits, this raises important questions about duty of care and risk exposure.
2. Coverage gaps for volunteers and drivers
Volunteer drivers and occasional staff drivers are common across the nonprofit sector. However, the new framework places increased importance on driver designation.
- Only listed drivers have access to optional benefits
- Unlisted drivers may receive mandatory coverage only
- Organizations must maintain accurate, up-to-date driver records
Failure to do so could result in unintended gaps, particularly in the event of a serious claim.
3. Dependency determines access and it's not straightforward
A key concept in the new system is dependency. To qualify for optional benefits in some cases, an individual must be considered more than 50% dependent on an organization for care or financial support. However, this isn't a fixed definition:
- Determinations are made case by case
- Financial support, care levels and living arrangements are all considered
- Outcomes may vary and may be legally challenged
For nonprofits delivering varying levels of service (from full-time residential care to occasional support) this creates operational uncertainty that must be actively managed.
Priority of payment: A new claims reality
Another major change is that auto insurance becomes the primary payer for accident-related expenses.
This means:
- Auto insurance responds first for medical and rehabilitation costs (with the exception of medication).
- Other coverage (e.g., group benefits) becomes secondary
While this may streamline certain claims, it also:
- Changes how benefits plans are used
- May extend claim durations
- Requires better coordination between auto insurance policies and benefit plans.
For nonprofit organizations, aligning insurance and benefits strategies will be critical moving forward.
Balancing cost and care: Coverage decisions that matter
Nonprofit leaders are now faced with a key decision: maintain full coverage or reduce to mandatory benefits only?
| Maintaining optional benefits | Reducing to mandatory coverage |
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Importantly, removing optional benefits could leave employees without income replacement and supported individuals without key protections, creating both human and organizational risk.
What nonprofit organizations should do now
To navigate the Ontario auto reform effectively, organizations should take a proactive approach:
- Review driver eligibility and records
- Ensure all regular and occasional drivers are properly listed and documented
- Assess exposure across operations
- Consider where transportation occurs and who may be affected by coverage gaps
- Coordinate with benefits plans
- Understand how changes to accident benefits interact with group insurance and disability coverage.
- Educate and encourage employees to review their personal auto policies and understand their responsibilities
- Take a measured approach to change
Given ongoing uncertainty and potential legal challenges, many organizations are choosing to maintain existing coverage in the short term.
Choice comes with consequence
Ontario's auto reform introduces greater flexibility in accident benefits coverage, but for nonprofit organizations it also increases complexity and risk, placing greater emphasis on thoughtful decision-making, strong governance and proactive nonprofit risk management to protect employees, volunteers and the individuals they support. As leaders assess how these changes will affect their operations, access to sector-specific guidance becomes essential. For a detailed overview of the Ontario auto reform and Statutory Accident Benefits (SABS), read our full breakdown here.
