Auto insurance rules introduced by Ontario's Liberal government go into effect Wednesday. (Reuters)

Changes to Ontario's auto insurance that take effect Wednesday will provide less coverage for the same cost, critics say.

One of the most notable differences in the new standard auto insurance policy will be a 50 per cent cut in medical and rehabilitation benefits, to $50,000 from $100,000, and a corresponding drop in attendant-care benefits, to $36,000 from $72,000.

Premiums, however, will stay the same for most people. Mel Ghangas — who lives in Woodbridge just north of Toronto and works in the city — said the changes don't make any sense to him.

"But that's not fair," he said. "It's another way of this [insurance] industry making money I guess."

Bryan Yetman, president of the Insurance Brokers Association of Ontario, admits consumers will receive fewer medical and rehabilitation benefits for the same price.

"Yes, we're going to see reduction in coverage and yes, stability means that the price is going to stay relatively the same," he said Tuesday. "But in reality what the changes are going to do is to really introduce pricing stability to the product in the long term."

Yetman said the changes should end the double-digit annual increases Ontario drivers have been hit with over the past few years.

The Insurance Bureau of Canada said the average Ontario driver was paying $1,362.11 a year for insurance in September 2009, up 3.6 per cent from $1,314.26 at the same time the previous year.

But in November 2003, drivers were paying an average of $1,492.89 a year — 8.6 per cent more than the September figures, according to the bureau.

Rules target abuse

The new rules include a $2,000 cap on assessments after costs of exams and assessments skyrocketed 258 per cent over five years.

Duncan has said the rules can help cut down on fraud. He contends the number of claims and accidents has remained fairly stable, and blames the jump in costs on abuse of the system.

But Progressive Conservative Norm Miller says the changes will hurt Ontario families instead of fraudsters.

NDP finance critic Peter Kormos also isn't sold on the changes either.

"Benefits are going to be reduced significantly and premiums are going to continue to skyrocket," Kormos told CBC News.

"This is yet another round of highway robbery by the for-profit auto insurers of Ontario. They're awfully good at collecting premiums, never any good at paying out benefits and it's going to get even worse for consumers. "

But Yetman said even with the reduced benefits, the standard auto coverage will remain the richest in North America.

Under the new rules, income replacement coverage will fall to 70 per cent of gross income from 80 per cent, to a maximum of $400 a week. Housekeeping expenses and caregiver benefits currently available to all accident victims will now be restricted to those with catastrophic injuries.

However, consumers will be able to purchase additional levels of coverage in the same way they've been able to pay higher premiums to lower deductible levels.

"What's happened is that the standard product has been reduced and the nice thing is people who have a need for certain coverage can buy them back," said Yetman, adding that despite the changes, Ontario's standard auto coverage remains the most generous in North America.

Duncan has also said that the changes benefit consumers because they give them more choice.

With files from The Canadian Press