The Canadian Automobile Association (CAA) has seen a spike in the number of its members who have switched to pay-as-you-go auto insurance, particularly over the past few months during the pandemic lockdown.
CAA North and East Ontario CEO Jeff Walker outlined how the company’s usage-based auto insurance program, MyPace, launched last year in Ontario. It will soon be available in Atlantic Canada.
“The premise really is that instead of paying a fixed monthly fee for your car insurance that you actually pay literally by the number of kilometres you drive, so really for those people who are low kilometre drivers they could save a fair bit of money,” Walker explained to CBC News.
The usage-based insurance is meant for those who drive their vehicle fewer than 9,000 kilometres a year. CAA said it is ideal for retirees, public transit users who leave their vehicles at home, and others who live a low-mileage lifestyle.
MyPace works through a USB device, which plugs into a USB port in the vehicle. The device tracks the number of kilometres driven. Through the program, the user starts with a base rate, and their 1,000 kilometres, then are charged additionally for every 1,000 kilometre increment after that.
The COVID-19 pandemic has caused a shift in the workplace dynamic, forcing many to stay and work at home. Due to this, Walker said that CAA has seen a big increase in users switching to usage-based insurance.
Walker estimated that there has been about a 50% month-over-month increase in MyPace users for the past three months.
“Actually people who are two car households — you’d say it’s a two-income household — in the COVID environment, one or maybe even both of the people aren’t necessarily driving, maybe one of them or both of them are working at home.
“You could theoretically have regular insurance on one car and go to the MyPace product on another car.”
