New insurance rules for Ontario drivers starting in 2024

Car insurance concept.Man using phone to calling insurance agent for claim process after car crash.

Drivers in Ontario will soon have the option to lower their auto insurance premiums by opting out of a level of coverage, although experts are saying that it’s not worth the risk.

Starting in January 2024, Ontario motorists will be able to opt out of direct compensation property damage coverage (DCPD). This coverage protects car owners from the costs of vehicle damage resulting from a collision, even if the driver isn’t at fault. It also covers vehicle or contents loss. Although opting out of DCPD will reduce your car insurance bill, you won’t be covered for vehicle repairs, vehicle or contents loss, replacement vehicle, or other items.

The opt-out form states that “if the described vehicle is involved in a collision, the loss will be compensated even if the driver is not at fault.” It further goes on to state that “this insurance policy will not compensate you or anyone else, including the driver at fault or their insurance company, for the damage.”

The provincial government says that the change, is part of a larger multi-year strategy (first announced in 2019) that includes e-proof of insurance, improved rate regulation, and allowing insurance companies to provide more discounts and options to drivers.

“This is an important policy change that the government is introducing to give consumers more options,” said a spokesperson from the Ministry of Finance.

Insurance premiums in Ontario have increased approximately 12 per cent in the last five years, with an average premium of about $1,700 in 2023. In most cases, DCPD coverage is included as part of a standard auto insurance package, along with other coverage options such as 3rd party liability coverage, statutory accident coverage, and uninsured auto coverage.


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