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

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Do you only go to the office a few times a week? You could benefit from a reduced auto insurance premium by switching to pay-as-you-go insurance

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Canadians who have been fortunate enough to maintain stable employment throughout the pandemic have accumulated an estimated $180 billion in savings, according to the Bank of Canada.

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That’s because they were spending a lot more time at home and less time eating out, going to concerts, traveling, and commuting to work. With Canadians now facing high inflation and the prospect of an impending recession, they would do well to find additional savings wherever they can.

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

And with 25% of Canadians now working in a hybrid model, as reported by a recent Aviva Canada studya good portion benefits from this product.

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What is pay-as-you-go car insurance?

PAYG insurance (also called pay-as-you-drive) is a type of usage-based insurance which relies on telematics to track your mileage.

While typical usage-based insurance measures the way(s) you drive, for example if you tend to accelerate or brake too hard, pay-as-you-go insurance looks at the distance traveled. For hybrid workers traveling only to the office one to three days a week, this could mean a reduction in the car insurance premium.

CAA’s MyPace, for example, is designed so low-mileage drivers can save money by spending less time on the road. Depending on the length of your trip, you could realize savings on your premium ranging from 1% to 70%. Someone who drives 6,000 kilometres, for example, could save up to 25% through the program.

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The catch is that if you meet or exceed the program’s annual 12,000 kilometer limit, you won’t get any savings. Drivers are charged a base rate for their initial 1,000 kilometres, then are billed progressively up to the maximum limit of 12,000 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?

Your eligibility for pay-as-you-go insurance depends on where you live. Insurers must obtain approval from provincial regulators before marketing this type of service. In provinces like British Columbia, Saskatchewan, Manitoba and Quebec, where auto insurance is public and government-owned, telematics offerings are not yet on the table. If you wish to use pay-as-you-go insurance, you must reside in Ontario, New Brunswick, Nova Scotia or Prince Edward Island, where it has been approved.

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

But if you’re comfortable doing it and don’t drive every day to and from the office, pay-as-you-go insurance might just complement your hybrid work style. Review the number of miles you’ve driven and talk to a broker or car insurance company to see if it might be right for you.

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

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