Drivers should consider opting into extra insurance coverage rather than taking advantage of the latest opt-out available under Ontario’s updated auto insurance rules, says Toronto insurance lawyer Rohan Haté.

As Global News recently reported, from January 2024, the Financial Services Regulatory Authority of Ontario will allow insurers to provide automobile owners with the opportunity to opt out of the previously mandatory Direct Compensation Property Damage coverage on their vehicles.

Trading discounts for coverage
In exchange for a premium discount, the new OPCF 49 form prevents policyholders from making claims for physical damage to their car if it is stolen or involved in a collision — including claims for replacement, loss of use of the vehicle and any damage to the car’s contents — even if the accident was not their fault.

It’s not clear how significant the premium savings will be for insured drivers who add the OPCF 49 to their policy, but Haté, a lawyer with McPhadden Samac Tuovi Haté LLP, says it will not be enough for him to consider opting out.

In fact, he says drivers who wish to tailor their automobile insurance products would be better served by taking advantage of upgrades already available under the existing rules rather than reducing coverage.

“In general, if you have the choice, I suggest opting in,” Haté says. “In the long run, when something happens, people are never glad they saved a few bucks a year on their premiums. They just wish they had the extra coverage.”

Premiums up for Ontario drivers
At the very least, drivers should consult their broker or insurance agent to ensure they are fully aware of all their coverage choices before committing to a policy, he adds.

The FSRA amendments were part of a suite of measures proposed in the provincial budget to tackle high auto insurance rates, along with commitments to improve access to usage-based insurance programs and crack down on fraud.

They followed hot on the heels of a report that found Ontario drivers are paying an average premium of $1,744, up 12 per cent on average since 2021.

The survey, carried out by insurance comparison site RATESDOTCA, blamed the hikes on inflation, parts shortages and a post-pandemic spike in road use, with Brampton, Ont. among the worst affected regions. Drivers in that city can expect to pay more than $2,700 annually for their auto insurance in 2023, up 40 per cent compared to 2021.

The latest round of amendments will not affect policyholders’ accident benefits coverage, but Haté explains that historic cuts in the area are one of the main reasons for the additional insurance options open to drivers.

Lesser-known optional benefits
In 2016, the Statutory Accident Benefits Schedule was amended to reduce the combined limit for attendant care and medical rehabilitation services available for catastrophically injured victims to $1 million from the old $2-million limit. However, insureds can boost their entitlements to the previous levels by upgrading their premium.

Other optional benefits are much less well-known, according to Haté. For example, he says few drivers are aware of OPCF 43 – the waiver of depreciation and replacement value. Under this endorsement, drivers who purchase or lease a brand-new car are covered for the replacement cost of another brand-new car when a total loss claim is made within a defined period.

Considering the ongoing spate of car thefts in the Toronto area, Haté says victims of robberies will be in very different positions as they look for a replacement, depending on whether their policies included the OPCF 43.

“The cost of some new cars has gone up by $25,000 or more in the last couple of years, and that endorsement would cover the difference,” he says.