CAA Brings Pay-Per-Km Insurance to Canada
Pay-as-you-drive insurance is coming to Canada. CAA Insurance is launching a new way for drivers who don't cover much mileage to benefit on their premiums.
The new program is called CAA MyPace, and it is launching in Ontario in July. It lets drivers pay for their car insurance in 1,000 km blocks. Pay a base yearly rate, and then each time you use up your 1,000 km block, the system alerts you and lets you pay for another.
CAA Insurance pitches the new plan at drivers who cover less than 9,000 km per year, like seniors and drivers who mostly use public transit. "Over the last number of years, auto insurance has been front of mind for a lot of Ontarians," said Elliott Silverstein, manager, government relations, CAA South Central Ontario. "Today's announcement provides an additional layer of choice for those who are low-mileage drivers and marks an important step in the modernization of insurance in Ontario."
To monitor your driving, the program uses a device that plugs into your vehicle and monitors the distance covered. But unlike some other insurance options that track your actual driving and give you a discount based on your driving habits, this one is only looking at your kilometers.
It's not the first time for usage-based car insurance in Canada. Insurer Aviva tried a pilot of a similar program, but it was discontinued in 2010 before a mass rollout to consumers. High costs related to supporting the program were given as a major reason for the cancellation, which monitored acceleration, braking, time of vehicle use and other driving patterns.
This type of insurance was initially popularized in the UK. It has also made an appearance in the US through National General Insurance and GM's OnStar program. That program uses GM's OnStar in-car telematics service to track driving distance, instead of a separate device. The program advertises that drivers who cover less than about 24,000 km per year can save on their insurance, and provides a further discount to OnStar subscribers.
We reached out to GM Canada to see if it was planning to extend the service to Canadian OnStar subscribers. A spokesperson from GM told us that the service is currently being explored for the Canadian market.
