Big Savings for Low-Mileage Drivers
If you drive less than 12,000 km per year, pay-as-you-go auto insurance gives you more control over your costs by letting you pay only for the distance you drive. Low-mileage drivers can save hundreds of dollars annually while still enjoying full protection.
How Pay-As-You-Go Insurance Works
With pay-as-you-go auto insurance, a small mileage tracker
is plugged into your car’s diagnostic port to measure how far you drive.
Your costs are then based only on the distance you travel — nothing
else.
Unlike some telematics programs that monitor speed, braking, or driving
times, this system only tracks mileage. It’s simple, secure, and
designed for drivers who use their vehicles less — like city residents,
remote workers, or retirees.
What’s Covered by Pay-As-You-Go Auto Insurance?
Pay-as-you-go insurance is simply a different way to pay for your auto coverage. Just like any standard Canadian auto policy, it includes the mandatory protections you need on the road:
Third-Party Liability
If you’re at fault in an accident, you could be sued for property damage or injury. This coverage pays for legal fees, settlements, and court awards. The legal minimum is $200,000, but we recommend $2 million for stronger protection.
Accident Benefits
Helps cover medical expenses not included in government health plans. This may include rehabilitation, attendant care, lost income if you can’t work, and even the cost of a substitute caregiver for children or elderly dependents.
Direct Compensation – Property Damage (DCPD)
If another driver is at fault, this coverage pays to repair your car—with no deductible. It can also cover items inside your vehicle and provide a rental car while yours is in the shop.
Uninsured Automobile Coverage
If you’re hit by an uninsured driver or involved in a hit-and-run, this coverage ensures you can recover damages as though the other driver had insurance.
Frequently Asked Questions About Mileage-Based Auto Insurance
How much money can I save with mileage-based insurance?
Savings depend on how far you drive. For example, if you drive around 8,000 km a year you could save about 5%, while driving closer to 1,000 km could mean savings of up to 70%. If you drive more than 12,000 km annually, you’ll likely benefit more from a standard auto policy.
How do payments work?
Mileage-based insurance includes a base rate to cover your vehicle when it’s not being driven. On top of that, you pay in increments (for example, per 1,000 km). This way, you’re only paying for the distance you actually drive. Payments can usually be made upfront or spread across the year, similar to a traditional policy.
Is there an app?
Yes. Most mileage-based programs come with a mobile app that lets you track your trips, monitor your savings, and see how many kilometres you have left on your plan.
How is mileage tracked?
A small device measures your driving in set increments (often per 1,000 km). You’ll receive notifications through the app so you always know how much distance remains on your plan.
What if I drive more than 12,000 km a year?
If you exceed 12,000 km annually, the savings will no longer apply. At that point, switching back to a standard auto policy is usually the better option.
Does mileage-based insurance monitor my driving behaviour?
No. Unlike some telematics programs that track speed, braking, or time of day, mileage-based insurance only monitors how far you drive.
Does mileage-based insurance work for all vehicles?
Not all vehicles are compatible with mileage-tracking devices. For example, very old models or some specific fuel types may not qualify. A broker can confirm whether your car is eligible.
As a brokerage working with over 70 of Canada’s leading insurance companies, we provide access to a wide range of coverage options at some of the most competitive rates in the country. Want to explore the solutions available to you? Here are just a few examples.