Death & Funeral Benefits in Ontario Auto Insurance: Should You Keep Them?

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Death and funeral benefits became optional on Ontario auto policies on July 1, 2026. They pay fixed lump sums to a surviving spouse and dependants, plus a capped amount toward a funeral, if someone covered by the policy dies because of an auto accident. The case for keeping them rests on three things: the amounts are set by regulation rather than by anything you have to prove, they are paid regardless of fault, and for a household without life insurance they may be the only money that arrives at all.

The Statutory Accident Benefits Schedule sets the amounts, and Ontario's regulator lists them on its consumer page. Under the standard benefit, a surviving spouse receives a $25,000 lump sum, each dependant receives $10,000, and funeral expenses are covered up to $6,000. An optional increase raises those to $50,000 for the spouse, $20,000 per dependant and a maximum of $8,000 for funeral costs.

These are no-fault payments. They come from the deceased person's own insurer under the accident-benefits side of the policy, and they do not depend on who caused the collision. Any claim against an at-fault driver for the loss of a family member is a separate matter, decided in a different part of the system. For the structure, see what statutory accident benefits are.

Ontario Regulation 383/24 amended the schedule so that, for policies entered into or renewed on or after July 1, 2026, only medical, rehabilitation and attendant care remain mandatory. Every other accident benefit is offered as an option — a residual rule, not a short list — and death and funeral benefits sit inside the optional group with income replacement, non-earner, caregiver and housekeeping.

The defaults run in opposite directions. A renewing policy keeps the benefits it had, carried forward as optional coverage in the amounts previously payable, unless you and your insurer agree in writing to decline or change them. A new policy starts at the mandatory minimum, and death and funeral benefits are there only if they are added. Insurers must still offer them.

The reform also narrowed who the optional benefits apply to: the named insured, their spouse, the dependants of either, and the people listed on the policy as drivers. For this benefit the question is whether the person who dies was inside that group on a policy that carried the benefit. A regular driver who is not listed is the gap to check first.

The benefit pays to the people the schedule defines as a spouse and as dependants. The spouse receives the spousal lump sum; each dependant receives the dependant amount; the funeral amount goes toward the cost of the funeral itself. A single person with no spouse and no dependants leaves no one to receive the lump sums, so for them the funeral portion is the part that would respond.

That is the first filter for the decision. If someone depends on you — a spouse, children, a parent you support — the lump sums have a recipient. If no one does, the question narrows to funeral costs.

Each optional coverage carries its own premium, and FSRA expects the premium for each one to be shown clearly on a quote, so the cost of this benefit is a number you can ask for rather than estimate. Measure it against what the benefit does.

• The amounts are fixed by regulation. Nothing has to be proven about the deceased person's earnings, health or prospects. A household receives the scheduled amounts because the facts of death and relationship are established.
• It is paid regardless of fault. A single-vehicle collision with no one else to claim against still triggers it.
• It is separate from life insurance. For a household that has life insurance, this is an additional lump sum. For one that does not, it may be the only lump sum.
• Funeral costs arrive at the worst possible time. A capped amount toward them is a specific, predictable relief.

None of that makes the benefit large. The standard amounts are modest next to what a family loses, and the optional increase is still modest. The honest frame is that this is a floor, delivered without argument. For scale, the regulator's costing work identifies disability income — not death and funeral — as the optional coverage that carries the highest premium of the group; the number for this one is on your quote.

• Households with no life insurance. Newcomers to Canada, young families and self-employed people are over-represented here, often because life coverage is still on the to-do list.
• Single-income households with children. The dependant amounts respond per child.
• Anyone supporting a parent or an adult child who meets the schedule's definition of a dependant.
• Households where the main driver is also the main earner, and where a lump sum would buy time to reorganise.

Declining can be a reasonable conclusion rather than a shortcut.

• You have no spouse and no dependants, and you have set money aside for your own funeral costs.
• You hold life insurance that would respond to death from any cause, at an amount that makes the scheduled lump sums immaterial, and you have confirmed the policy is in force.
• The premium shown for this coverage is, on your quote, high relative to the amounts it pays. Ask for the number.

Even then, note that declining removes the benefit for everyone inside the policy's covered group, not only for you. A spouse or a listed teen driver is covered by the same election.

• Does this policy carry death and funeral benefits today, and at the standard or the increased amounts?
• What does each level cost, shown separately from the other optional benefits?
• Who in this household would receive the lump sums, and is each of them inside the covered group?
• Is every regular driver of this vehicle listed on the policy?
• What life insurance do we actually hold, and is it in force?

For the full July 1, 2026 reform in one place, see the Ontario auto reform guide.

TopRates.ca is educational. Quotes are not offered or arranged on this site today.

Ontario Regulation 383/24, amending O. Reg. 34/10 (Statutory Accident Benefits Schedule — Effective September 1, 2010): s. 2(1.0.1) to (1.0.4) making the benefits in Parts II, IV, V and VI optional for policies entered into or renewed on or after July 1, 2026, continuing renewing policies "in the amounts previously payable," and limiting the optional benefits to four groups. Death and funeral benefits are in Part V. Made October 10, 2024; filed October 11, 2024. Checked October 2026.

O. Reg. 34/10, Statutory Accident Benefits Schedule, Part V (death and funeral benefits): entitlement of a spouse and dependants, and the funeral benefit. Confirm current amounts against the consolidation in force on Ontario e-Laws.

Financial Services Regulatory Authority of Ontario (FSRA), "Customize your liability and accident benefits coverage": standard death and funeral benefits of $25,000 to an eligible spouse, $10,000 to each dependant and a maximum of $6,000 for funeral costs; optional increase to $50,000, $20,000 and $8,000. Checked October 2026.

FSRA, "FSRA auto reform accident benefits optionality Q&A for insurers" (updated February 12, 2026): insurers must offer the optional benefits; premium per optional coverage to be clear on the quote; renewals continue existing coverage until the customer elects changes in writing.

Oliver Wyman, "Reform Costing: Accident Benefits Regulations," prepared for FSRA (May 7, 2025): disability income as the optional accident-benefits sub-coverage with the highest premium.

Insurance Bureau of Canada, "Ontario Auto Insurance Changes": plain-language descriptions of the death and funeral benefits and the four groups optional benefits apply to. Checked October 2026.