Ontarians to benefit from pay-as-you-go insurance

Ontario is set to be the first place in the country to receive Canada’s first, pay-as-you-go auto insurance program.

The new technology, from CAA Insurance, hopes to put Canadians in the driving seat when it comes to managing their monthly insurance payments.

Dubbed CAA MyPace, the new technology uses a telematic device which is plugged into the vehicle, and can track exactly how far a car has travelled. Drivers will have the option to pay for their insurance in 1,000km increments. Those who are signed up to the scheme will be charged a base rate, and will then pay every time they hit a new kilometre increment, up to 9,000km.

Customers can then access the information collected by using a mobile app or online.

"We believe that insurance options should be designed based on individual lifestyles and the various stages of people's lives," said Matthew Turack, president, CAA Insurance. "People should be able to access the insurance they need, when they need it at a price and payment schedule that works for them.”

Unsurprisingly, the app will be most useful for those drivers who already have a pretty low mileage. Whether you are a keen cyclist or someone who uses public transport for the daily commute, if you spend less than average behind the wheel, using CAA MyPace could help drivers cut down on insurance costs.

The app is due to go live some time in the summer.