Ontario SABS 2026: Income Replacement Benefits — Do You Still Have Coverage?

Co-Author: Michelle Bragg, VP Personal Lines, RIBO Licensed | Last Reviewed: June 2026

Do I Still Have Income Replacement Benefits After the Ontario 2026 Auto Insurance Changes?

Starting July 1, 2026, income replacement benefits will no longer be automatically included in Ontario auto insurance policies. Under the revised Statutory Accident Benefits Schedule (SABS), you'll need to choose whether to keep this coverage, and if you opt out, you won't receive wage replacement if you're unable to work after a car accident. This change applies to all new and renewing policies from that date forward.

This content is for informational purposes only. Consult a licensed insurance broker for advice specific to your situation.

What Is the Income Replacement Benefit in Ontario?

The income replacement benefit is part of Ontario's accident benefits coverage. It provides financial support if you're injured in a car accident and can't work. Traditionally, this benefit has covered 70% of your gross weekly income up to a maximum of $400 per week (or $1,733 per month), paid for up to 104 weeks (two years). In some cases, extensions are available based on medical documentation.

According to the Financial Services Regulatory Authority of Ontario (FSRA), this benefit was designed to bridge the gap between when you're injured and when you can return to work or access long-term disability benefits. Until now, every Ontario driver has carried this coverage automatically — you didn't have to think about it.

But as of July 1, 2026, that changes. Income replacement becomes optional, and you'll make an active choice at renewal.

Why Is the Income Replacement Benefit Becoming Optional?

The provincial government revised SABS to give drivers more control over their coverage and, theoretically, lower premiums by removing mandatory benefits that not everyone uses. The Insurance Bureau of Canada (IBC) has noted that these changes are part of a broader effort to modernize Ontario's auto insurance system and address affordability concerns.

The rationale: if you already have robust workplace disability insurance, employment insurance, or other income protection, you may choose to waive the income replacement benefit and reduce your premium. But that decision comes with real risk — and it's permanent for the life of that policy term.

If you're a growing family managing a mortgage, childcare costs, and household expenses, losing two years of income replacement coverage could be financially devastating if you're seriously injured. This is a coverage you hope never to use, but one that can make the difference between maintaining stability and facing hardship.

What Happens If You Opt Out of Income Replacement Benefits?

If you choose not to purchase the income replacement benefit after July 1, 2026, you will not receive any wage replacement through your auto insurance policy if you're injured in a car accident and unable to work — regardless of fault. That means:

• No weekly payments to help cover your mortgage, rent, groceries, or childcare.
• No bridge income while you wait for Employment Insurance (EI) or long-term disability (LTD) to kick in.
• No coverage for the self-employed, who typically don't have access to EI or employer-sponsored disability plans.

You may think, "I have sick days," or "My employer offers short-term disability." That's helpful — but those benefits often have waiting periods, caps, and conditions. Short-term disability may cover only 60–70% of your income for a limited period, and not all employers offer it. According to Statistics Canada's 2023 Labour Force Survey, approximately 35% of Canadian workers lack any form of employer-sponsored disability coverage.

If you're self-employed, a contract worker, or a gig economy professional, the risk is even greater. You likely don't have group benefits, and the income replacement benefit has historically been your primary safety net. Opting out could leave you with no financial protection at all.

For families managing tight budgets, the absence of income replacement coverage could force impossible decisions: draining savings, carrying credit card debt, or even losing your home. This isn't fear-based messaging — it's a practical consideration of what happens when income stops but expenses don't.

How Much Does Income Replacement Benefit Cost in Ontario?

Exact pricing varies by insurer, driver profile, and claims history, but early industry estimates suggest that opting in to income replacement benefits may add approximately $100 to $200 annually to your auto insurance premium. That's roughly $8 to $17 per month.

For context, the Applied Systems Applied Rating Index Q1 2025 reported that Ontario auto insurance premiums averaged $1,780 annually. Adding income replacement benefits represents a 5–11% increase — meaningful, but not exorbitant compared to the protection it provides.

When you weigh that cost against the potential loss of $1,733 per month for up to two years (a total of $41,592 in potential benefits), the value becomes clear. A BIG broker can help you compare quotes with and without the coverage so you can make an informed decision based on your family's financial situation and risk tolerance.

Who Should Keep the Income Replacement Benefit?

Not everyone needs income replacement coverage, but most people do. You could consider keeping it if:

• You're self-employed or a contract worker. You likely have no access to EI or group disability benefits, making this coverage essential.
• You don't have employer-sponsored disability insurance. Many workplaces don't offer short- or long-term disability, especially in retail, hospitality, or small businesses.
• You're the primary or sole earner for your household. If your income supports a mortgage, dependents, or other fixed costs, losing it for weeks or months could be catastrophic.
• You have a high income. While the benefit caps at $400/week, it still provides meaningful support during recovery — and you may have higher fixed expenses to cover.
• You have dependents. Daycare, groceries, school costs — they don't stop when you're injured. Income replacement helps you keep the lights on.

Even if you have some workplace coverage, income replacement benefits can fill gaps. For example, if your employer's short-term disability has a two-week waiting period, the SABS benefit can bridge that gap. If your LTD plan covers only 60% of income, the auto insurance benefit adds to it (though benefits may be coordinated).

If you're not sure where you stand, review your employment benefits package or speak with HR. Then talk to a BIG broker who can walk you through your options and help you understand how the pieces fit together.

Income Replacement Benefit vs. Disability Insurance: What's the Difference?

It's easy to confuse these, but they serve different purposes:

Feature	Income Replacement Benefit (SABS)	Disability Insurance (Private/Group)
Trigger	Auto accident only	Illness or injury (any cause)
Amount	70% of gross income, max $400/week	Varies; typically 50–70% of income
Duration	Up to 104 weeks (2 years)	Varies; often longer or until retirement
Cost	Included in auto premium (if selected)	Separate premium or employer benefit
Coverage	All drivers (if opted in)	Depends on employment or purchase

The income replacement benefit is accident-specific. It won't help if you develop a chronic illness or are injured outside of a car accident. Disability insurance, on the other hand, is comprehensive but may have exclusions, waiting periods, and eligibility criteria.

Ideally, you'd have both: income replacement for auto accidents, and disability insurance for everything else. If you must choose, consider your risk profile and financial obligations carefully. For more on protecting your income holistically, explore our post on factors that affect life insurance premiums.

What About Optional Enhanced Income Replacement?

Some insurers may offer an enhanced or upgraded income replacement benefit that provides higher weekly limits or longer benefit periods. This is separate from the standard benefit and comes at an additional cost.

If your income exceeds $52,000 annually (which results in the maximum $400/week benefit under standard coverage), or if you want protection beyond two years, enhanced coverage may be worth exploring. A BIG broker can explain the options available through various insurers and help you determine whether enhanced benefits fit your needs.

Can You Add Income Replacement Benefits Back Later?

Once you waive income replacement benefits at renewal, you cannot add them back mid-term. You'll need to wait until your next policy renewal, typically 12 months later. During that gap, you'll have no coverage.

This is why the decision requires careful thought. If your circumstances change — you become self-employed, lose your workplace disability, or welcome a new child — you'll be without this safety net until your policy renews.

Before making any changes, sit down with your household budget, review your existing benefits, and talk to a broker. Opting out may save you money in the short term, but it could cost you significantly more if you're injured and unable to work.

What Else Is Changing in SABS 2026?

Income replacement is the most significant change, but it's not the only one. Starting July 1, 2026, the following benefits will also become optional:

• Caregiver benefits (for those who care for an injured family member)
• Housekeeping and home maintenance benefits (assistance with daily tasks if you're unable to perform them)
• Indexation benefits (annual increases to benefit amounts based on inflation)

Like income replacement, these benefits were previously automatic. Now, you'll choose whether to carry them — and pay for them. Opting out of all optional benefits may reduce your premium by 10–15%, but it also leaves you exposed if the unexpected happens.

For a comprehensive look at what's covered under auto insurance, review our guide on optional auto insurance coverages.

How to Review Your Accident Benefit Options Before July 2026

Here's a practical action plan:

1. Review your workplace benefits. Do you have short-term disability? Long-term disability? How much do they pay, and for how long?
2. Assess your household budget. Could you cover your mortgage, childcare, and essentials without income for two months? Six months? Two years?
3. Consider your employment status. Are you self-employed? Do you have a stable employer? Are you in a high-risk occupation?
4. Request a quote comparison. Ask a BIG broker to show you premium costs with and without income replacement benefits.
5. Make an informed decision. Don't opt out just to save money. Opt out only if you genuinely have equivalent or better coverage elsewhere.

If you're unsure, err on the side of keeping coverage. The cost is modest compared to the financial devastation of losing income after a serious accident.

For more context on how auto insurance changes affect you, read our post on speeding tickets and car insurance in Ontario.

FAQs: Income Replacement Benefits and SABS 2026

Do I still have income replacement benefits automatically after July 1, 2026?

Not necessarily. Starting July 1, 2026, income replacement benefits become optional in Ontario. You may have to actively choose to purchase this coverage when your policy renews.

How much is the income replacement benefit in Ontario?

The standard income replacement benefit provides 70% of your gross weekly income, up to a maximum of $400 per week, for up to 104 weeks. Enhanced options may be available for higher earners or those seeking longer benefit periods.

What happens if I waive income replacement coverage?

If you opt out, you will receive no wage replacement through your auto insurance if you're injured and unable to work after a car accident. You'll rely solely on workplace benefits, Employment Insurance, or personal savings — if available.

Is income replacement benefit worth it for self-employed people in Ontario?

Yes. Self-employed individuals typically have no access to Employment Insurance or group disability benefits. The income replacement benefit is often their only financial safety net if injured in a car accident, making it essential coverage.

Can I add income replacement benefits back if I change my mind?

No, not mid-term. If you waive the benefit at renewal, you cannot add it back until your next policy renewal, which is typically 12 months later. During that time, you'll have no coverage.

Does income replacement benefit cover me if I'm injured outside of a car accident?

No. The SABS income replacement benefit applies only to injuries sustained in auto accidents. For broader income protection, consider private disability insurance or workplace coverage.

Protect Your Income: Review Your Coverage Today

The Ontario auto insurance landscape is changing, and your family's financial security depends on the decisions you make at renewal. Income replacement benefits provide critical protection if you're injured and unable to work, but only if you choose to keep them.

Before July 1, 2026, take the time to understand what you're covered for, what you're giving up, and what it will cost to maintain the safety net your family may one day need. Get a car insurance quote or speak with a BIG broker to review your accident benefit options and make the choice that's right for you.