Popularity of pay-as-you-drive car insurance continues to grow
If you drive infrequently, you could save a bundle on car insurance by paying as you drive, rather than a flat amount for coverage every six months.
U.S. insurance companies have been offering potentially cheaper, pay-as-you-drive plans that, for billing purposes, track when, how, how much and where drivers use their vehicles instead of basing rates on statistics and past trends. The theory is that they can offer lower rates to people who seldom drive and are deemed less risky.
Progressive Insurance introduced the product seven years ago and several carriers now offer it, including at least three that launched versions late last year.
And the idea is gaining traction among consumers, it seems.
More than one-in-three drivers would consider switching from a traditional vehicle insurance plan to one based on when and how much a vehicle is driven, according to a survey conducted by Lynx Research Consulting.
Drivers could save anywhere from 5 to 30 per cent on insurance premiums depending on driving habits, according to analysts.
PAYD plans work best for retirees and college students who don't drive much, public transit users who need a weekend car and families with an extra car they drive only occasionally.
Amd while the idea has been slow to catch on here, at least one company, Industrial Alliance, has adopted a similar approach through its Mobiliz auto insurance policy for young people.
Completely web-based, the Mobiliz program offers a free one month trial and if, after the first month, the driver adopts “responsible” driving behaviour, he or she could see as much as a 25 per cent reduction in premiums over the first year.
Driving behaviour has reportedly improved for 52 per cent of the young drivers who have been taking part in the new auto insurance policy, the company reports.
Would you buy a pay-as-you-drive policy if you could? How much of a potential discount would you need as an incentive?
By Gordon Powers, MSN Money
Posted by: Ken | Sep 6, 2021 10:00:27 AM
For what it is worth, this is a load of poo-poo as far as the Canadian insurance market is concerned. The survey mentioned was done in the U.S., which is a night-and-day market difference compared to Canada. 5%- to 30%? In your dreams! The insurance industry in Canada is a greed-driven industry, right up there with banks, oil companies, and the telecom companies. Their head group, The Insurance Bureau Of Canada is a very powerful lobby group and will do its best to keep it there. You can say you drive infrequently, but your loyal-to-the-insurance-company-not-you broker will say, "So?". Sure they will give you a discount for less driving, but take one long-distance trip, and you can kiss your discount not only good-bye, but you will be hammered with a record increase! The only way this would work is for the Government to order it with no strings attached. But, the ever so greedy I.B.C. will fight it all the way, and it will never come to be. Just look at the promised 15% reduction in Ontario. The greedy pigs from the insurance companies are raising rates a very minimum of 30% in 2013. And don't question them, or your broker will cancel your coverage. After all, they represent the insurance company, and don't care about you. The only ones who benefit are the shareholders. Now those are the people insurance companies care about.
Posted by: Scott | Sep 7, 2021 12:59:56 AM
Just put a tracker in every car.better drivers get better rates.you drive like a an idiot you pay more....money talks.
Posted by: Brad | Sep 7, 2021 6:02:41 AM
Canadian businessmen are so archaic and greedy, especially the insurance industry, they can all die and go to hell. I have no sympathy to them whatsoever. I want more American businesses such as Target, Walmart and those offering pay-as-you-go auto insurajnce to move in here and show Canadian business what competition and valuing customers really means. I would put one of these trackers on my vehicle in a heartbeat. I have nothing to hide and care not one whit if they track my every movement in minute detail if it reduces my insurance rates to something reasonable. If it failed to reduce my rates I could remove the tracker and go back to what I have now. I dunno, seems to me the only people who could fear a tracker are those who are scamming insurance now by under-reporting their mileage, using their vehicle to drive back and forth to work while claiming to use it only for pleasure to get a rate reduction, driving recklessly, in short, those dorks who are driving up rates for all the good drivers.
Also, I think we need to find a way, perhaps a new technology, to hunt down and execute the slimeballs who just don't get it about cell phone usage while driving. They've had their chance but they have proven they don't give a damn about anybody but themselves so execute them before they kill or maim other people. The reason why phone usage while driving is unacceptable is simple logic that is validated by empirical evidence but they deny all that because accepting it means they have to grow up and curb their childish impulses when their infantile minds think freedom means indulging all of their whims and impulses no matter the price. I have seen and been involved in ever increasing numbers of near misses ever since people stated talking and now texting on their phones while driving and have been hit twice in the last two years by these scumgbags. It's just a matter of self-defense... kill them before they kill us.
Posted by: Becks | Sep 7, 2021 9:34:49 AM
The biggest downside to me is that it tracks where you go. I don't like the idea of something tracking exactly where I go and keeping a record of that. It seems like it's taking away my privacy.
Posted by: John Cairns | Sep 7, 2021 9:41:29 AM
The insurance industry would do better if they concentrated their efforts into reducing "Fraud" committed by the many new "Foreign Groups" in Canada. We didn't have this huge problem 40 years ago. If you want to clean up Canada...clean up the people you let into our country.
Posted by: Joy | Sep 8, 2021 7:33:17 AM
How about equipping vehicles with two horns.....one normal horn, and one that shouts GET OFF THE PHONE!!,,