Auto Insurance

CAA to launch ‘pay as you go’ car insurance for Ontario drivers this July

By: Jessica Mach on May 24, 2018

Ontario drivers will soon have access to pay-as-you-go auto insurance, which one insurance company is introducing to help rein in the province’s high premium costs.

The program, called MyPace, is being launched by CAA Insurance. Drivers are charged a base rate, and then additional fees for each 1,000 km increment they drive. A telematics device plugged into the vehicle, and that connects to a mobile app or web portal, measures the distance driven.

MyPace stands in contrast to traditional auto insurance programs, which use a different method to determine how much their customers will pay. Insurers typically set a fixed annual rate based on a customer’s driving history and a handful of demographic factors; that rate will then stay the same until the policy needs to be renewed, usually a year later.

CAA has not yet set a specific launch date for MyPace, but it will be available sometime in July, a CAA spokesperson confirmed to

The spokesperson also said that there will not be one base rate that applies to every customer. Base rates will instead be tailored to each individual driver based on their risk factors.

CAA’s program could potentially lower rates for many drivers — especially those who drive infrequently.

“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, in a statement.

“People should be able to access the insurance they need, when they need it at a price and payment schedule that works for them.”

Only a handful of auto insurers offer a pay-as-you-go option in North America. In 2010, Aviva Canada ended its five-year pay-as-you-go pilot, the “Autograph”, citing high support costs for maintaining the program. Mileage-based insurance policies are expected to reach 100 million drivers by 2020, according to a Frost & Sullivan study. The majority of these drivers will be based in the U.S., the U.K., and Italy.

Ontario drivers pay some of the highest auto insurance rates in Canada, despite also boasting a relatively low accident rate.

Ahead of the provincial election, which is slated to take place on Jun. 7, Ontario’s major political parties have been rolling out their platforms for addressing the issue.

The Liberal, Progressive Conservative and New Democratic parties have each vowed to crack down on fraud and postal code-based premiums, but some critics argue that such measures may not do enough to make a substantial dent in average premium rates