Hybrid office workers can benefit from pay-as-you-go car insurance

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Canadians who were fortunate enough to remain steadily employed throughout the pandemic racked up about $180 billion in savings, according to the Bank of Canada.

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That’s because they were spending much more time at home and less time dining out, going to concerts, traveling, and commuting to work. As Canadians are now facing high inflation and word of an impending recession, they would benefit from finding additional savings wherever they can.

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For those workers on a hybrid office model (commuting to the office just a few times a week), pay-as-you-go insurance can help lower auto insurance costs.

And with 25 per cent of Canadians now working within a hybrid model, as reported in a recent study by Aviva Canada, a good portion stand to benefit from this product.

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What is pay-as-you-go car insurance? 

Pay-as-you-go insurance (also referred to as pay-as-you-drive) is a type of usage-based insurance that relies on telematics to track your mileage.  

While typical usage-based insurance measures the way(s) in which you drive, such as if you tend to speed or break too hard, pay-as-you-go insurance looks at how far you drive. For hybrid workers only going into the office one to three days a week, this could mean a reduced auto insurance premium.  

CAA’s MyPace, for example, is designed so that low-mileage drivers can save money by spending less time on the road. Depending on how much you drive, you could see savings on your premium ranging from one per cent to 70 per cent. Someone who drives 6,000 kilometres, for example, could save up to 25 per cent with the program. 

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The catch is that if you meet or exceed the program’s 12,000-kilometre annual limit, you won’t see a savings benefit. Drivers are charged a base rate for their initial 1,000 kilometres and then incrementally charged up to the maximum 12,000 limit per year.  

With telematics-based auto insurance programs, drivers can either plug a telematics device into their car or download an app to their phone.  

Is pay-as-you-go insurance right for hybrid office workers? 

Whether you’re eligible for pay-as-you-go insurance depends on where you live. Insurance providers need approval from provincial regulators before bringing this kind of service to market. In provinces like B.C, Saskatchewan, Manitoba, and Quebec, where auto insurance is public and government-owned, telematics offerings are not yet on the table. If you do want to use pay-as-you-go insurance, you must live in either Ontario, New Brunswick, Nova Scotia or Prince Edward Island, where it’s been approved. 

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While pay-as-you-go insurance can result in some significant savings if you spend little time behind the wheel, some Canadians are reluctant to jump on the service because of privacy concerns and handing over their personal data to an insurance company.   

But if you’re comfortable doing so and aren’t driving to and from the office every day, pay-as-you-go insurance might nicely complement your hybrid work style. Review how many kilometres you’ve been driving and speak with an auto insurance broker or company to see if it might be a good fit.  

LowestRates.ca is a free and independent rate comparison website that allows Canadians to compare rates for various financial products, like auto and home insurance, mortgages, and credit cards.