By: Luke Jones, Published on May 24, 2018 01:10 PM, Last Update on May 24, 2018 10:11 AM
A new auto insurance product is coming to Ontario this summer, giving brokers another offering for consumers in the province. Created by MyPace, the solution is designed for vehicles that are driven less than 9,000 kilometres each year. The upcoming product was announced this week by the Canadian Automobile Association (CAA).
MyPace is the latest auto insurance product in Canada to make use of usage-based insurance (UBI) through a telematics vehicle and driver monitoring device. The service was given regulatory approval by the Financial Service Commission of Ontario (FSCO) in February.
Steve Kee, spokesman for the Insurance Bureau of Canada (IBC) says the introduction will bring a first-of-its-kind solution to the province:
“This is the first (Ontario auto insurance product) I am aware of with an incentive for people to drive less,” Kee said on Wednesday.
CAA confirmed MyPace will launch initially through 41 brokerage partners in Ontario, while it will also be available in stores.
Consumers “will start with a base rate and be charged in 1,000-kilometre increments,” CAA Insurance president Matthew Turack said this week. Insurers will assess the base rate on the same factors as any other personal auto insurance policy. The CAA will track driving habits and vehicle usage and increase rates for every 1,000 kilometres passed.
Once the insured vehicle passes 9,000 kilometres in a year, the price will move to being in-line with regular auto insurance premium rates. The value will be for consumers who drive their vehicles less than 9,000 kilometres each year.
“It’s not the first telematics product on the market, but seems to be the first one focused just on the amount driven,” Kee added.
“It shows what a competitive marketplace does,” Kee said. “It allows companies to deliver innovative solutions to their customers.”