A “tailor-made” car insurance to be paid according to the mileage: advantageous?

The insurer CAA Atlantic has launched an auto insurance program that looks like a wireless phone plan. Is it beneficial for consumers?

This type of insurance, which entered New Brunswick and Nova Scotia on December 1, was already available in Ontario since May 2018. It will be available in Prince Edward Island from the 21st. February, according to CAA.

MyPace insurance, which the supplier describes as “pay as you go”, allows the customer to be billed according to the distance traveled in increments of 1000 kilometers, in addition to a basic charge. .

In short, a computer device connected to the vehicle notes the mileage and transmits this information to a web application.

This application can warn the customer when they are approaching the 1000 kilometer threshold. If it exceeds it, the system starts another 1,000 kilometers and the customer is billed according to the distance traveled.

The insurance program is for people who drive less than 9,000 kilometers per year – either because they work from home during the pandemic or because they do not drive frequently.

Amanda Dean, vice president of Atlantic for the Insurance Bureau of Canada, says the mileage-based model can be beneficial for the customer, especially since many people drive less during the pandemic.

The spokesperson for this group of insurance providers explains that its members could not offer this type of protection until very recently in New Brunswick, because the rules governing the modification of automobile insurance rates did not allow it. .

It shows that several insurers have already shown a certain interest in this type of model.

“This is something insurers have wanted to be able to offer for a long time because customers have been asking for it,” she said.

She said she wouldn’t be surprised if other insurance providers adopted a similar model.

Michèle Pelletier, NB consumer insurance advocate, also believes this kind of package can lead to savings – but it all depends on the client’s lifestyle and the region in which they live. .

This may not be a good solution for everyone in New Brunswick, a province with many rural areas.

“If I live in a rural area, I’m not sure I’m going to be able to benefit from this. Even though I work from home, I still travel over 9,000 kilometers per year to the grocery store, ”she says by way of example.

However, she says motorists who live in urban areas may find it an advantage.

“The experience in Ontario really seemed to show that there was a reduction in premiums.”

She encourages people to assess their mileage needs to determine if this kind of program is right for them.

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