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Pay-As-You-Go Car Insurance

Tuesday, 23 March 2021

If you are travelling less, stopped commuting because you’re working from home, or just simply don’t drive much, you might be looking into ways to save money on your car insurance. It is mandatory in Ontario to have auto insurance when you drive, but when you drive fewer kilometers it doesn’t always make sense to pay for a traditional car insurance policy. Our BIG brokers now have access to a pay-as-you-go car insurance option for clients who drive less. Whether you are retired, rely on public transit, or just have a low-mileage lifestyle, this type of policy could be a great solution for you! Keep reading to learn more.

What is Pay-As-You-Go Car Insurance?

Pay-as-you-go car insurance essentially tracks the kilometers you drive with a device connected to your vehicle. Based on your mileage your annual insurance cost can be lowered by anywhere from 5% to 70% when compared to a traditional car insurance plan. You add kilometers to your insurance plan as you need them, so if you know you will be driving under 9,000 km annually, you could save a lot more on your car insurance with a pay-as-you-go option.

Qualifying for this pay-as-you-go car insurance solution is very similar to a regular car insurance quote. Your insurance broker will review questions about your driver’s history and insurance history. Be prepared to disclose information about previous accidents, how long you have been licensed, if you have received any traffic violations or other convictions.

How Much Does Pay-As-You-Go Car Insurance Cost?

Pay-as-you-go car insurance should come at no additional cost to you. All the equipment and instructions are provided for distance tracking and the rate you pay per kilometer is still based on traditional factors including your driving record, years of driving experience and distance driven. One of the great benefits to this approach is that you are now in control of when and how you pay for the kilometers you drive, which could save you money!

There is a base rate to provide coverage for your car while it’s not being driven, which can be made in monthly installments or can be paid in full up front. When your policy is issued, you will also pay for the first 1,000 km. After this, you only pay for what you need in increments of 1,000 km as you use them.

How does Pay-As-You-Go Car Insurance work for claims?

If you are in an accident while insured under this type of policy, the claims process is the same as a traditional insurance claim. Covered claims would be filed under your collision, comprehensive or other coverage, depending on the situation. To better understand your insurance policy, contact your BIG broker – they would be happy to discuss your coverage in greater detail. If you need to make a claim, BIG has a 24/7 claims line to assist you through the process.

Are There Any Restrictions?

Some vehicles are not compatible with the tracking device, therefore not all makes and models are eligible to participate in the pay-as-you-go car insurance program. Among those incompatible with the device are: electric vehicles, vehicles older than 1997, and diesel vehicles from 2005 and older. This is not an exhaustive list, and we recommend speaking with a BIG broker to learn more about your vehicle’s eligibility.

There is no limit to the number of vehicles you can insure with the pay-as-you-go car insurance option, however, depending on the provider there may be a limit of one vehicle per policy. Additional policies can be issued to accommodate multiple vehicles in your household.

How Do I Get Started with Pay-As-You-Go Car Insurance?

The simplest way is to get in contact with a BIG insurance broker to get your insurance quote started. Once you are ready to move forward with the pay-as-you-go option, you will follow these steps:

  • Enroll in the program and pay the base rate plus the first 1,000 km.
  • Install the device on your car.
  • Download the kilometer tracking app on your smartphone, which can be used to monitor your usage at any time when you log in.
  • Drive. Your insurer will automatically reload the next 1,000km when you have used up the ones you have.

What Happens Once I Get a Pay-As-You-Go Car Insurance Policy?

Once you have signed up for pay-as-you-go car insurance through Billyard Insurance Group, you will receive a welcome package from your insurance provider with details of your auto insurance policy and the terms and conditions.

The tracking device will arrive in a separate package with installation instructions. It can easily be plugged into your On-Board Diagnostics (OBDII) port in your vehicle and must be installed within 48 hours of your policy effective date.

Once you begin driving with the device, you can view your kilometer usage on the telematics app on your smartphone


When you’ve made a lifestyle change and you are driving much less, it’s helpful to know that there is an option out there that can help you save money on your car insurance. If you still have more questions about pay-as-you-go car insurance and how it works, don’t hesitate to contact us to learn more! Get started on an insurance quote now and see how much you could be saving.

By: Amy Legault