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Does temporary car insurance exist in Ontario?

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The concept of car ownership is rapidly changing in today’s sharing economy. Apps such as Uber, Lyft, and Turo are facilitating carpooling vehicles on options for consumers who value convenience and time over car ownership. Moreover, with promises of fully automated vehicles on the horizon, we are currently redefining our relationship to vehicles and travel today and for the future.

Redefining car ownership

With private ownership declining globally in the last year alone, some have suggested that we have collectively reached ‘peak car’. While private ownership might be on the decline across the globe, car use in Canada is on the rise with Ontario leading in new car registrations in 2017, which has some experts in social trend forecasting suggesting that Canadians’ relationship to vehicle travel might be shifting to a more functional-based one – reserving car usage to everyday trips to work, run errands, and so on. With that in mind, it makes sense to consider questioning the point of blanket coverage car insurance quotes that lock in price points to annual or bi-annual protection and look to temporary insurance plans or ‘pay-per-use’ options.

What is temporary car insurance?

Temporary car insurance plans are alternatives to traditional and extended – 12 months or more – insurance policy plans. Typically, temporary car insurance plans offer short-term comprehensive coverage solutions for your everyday tasks of loading up on groceries, Costco runs, or in situations where a friend might need to borrow your car.

While providing comprehensive coverage on a ‘pay-per-use’ basis, temporary car insurance plans are filling a critical gap in today’s sharing economy. Consumers see value in flexibility and control of their products, as well as being conscious of their ethical obligations to the environmental impact of fossil fuel consumption.

Insurance providers are gradually providing new options to respond to the needs of new consumers entering the marketplace that value a different relationship to vehicle ownership – one based on functionality, ease-of-use, and ability to determine the conditions of sharing their property while still being protected in case of accidents.

Across the board, car insurance companies are introducing new temporary insurance models to adjust and compete in the emerging sharing economy and better meet shifting consumer needs. With that in mind, do such models or programs exist in Ontario?

Current Ontario options

If you are looking for temporary car insurance in Ontario, your options are limited. It’s well known across the board by insurance and legal experts that Ontario has historically been tightly regulated by the Financial Services Commission of Ontario (FSCO) when it comes to controlling Ontario car insurance quotes for drivers. Moreover, most insurance providers across Canada will not offer insurance plans outside of 6-month packages as a baseline.

That being said, there are some alternative options that might (indirectly) meet your needs for temporary insurance in Ontario. For example, last year the Canadian Automobile Association introduced a ‘pay-as-you-go’ plan called MyPace for drivers that drive fewer than 9,000 kilometres per year. The MyPace program uses a device that is plugged into your car that syncs with a mobile app that is used to track your mileage and adjust your premium rate according to the distance you drive – or, how many times you have driven. The distinction between this program and other driving behaviour monitoring programs ( telematics) is that the MyPace program is only based on mileage – offering ‘pay-as-you-go’ use regardless of your driving style and offering savings to consumers that choose to drive less regardless of their driving habits.

As of now, the CAA MyPace is the only model in Ontario that offers a ‘pay-as-you-go’ plan which is approved by the auto insurance regulator – Financial Services Commission of Ontario – under the conditions that insurance providers are transparent and accountable to how driver data is collected and how this data is used to offer specific discounts.

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The Bottom Line

While a flexible and temporary insurance plan might not yet exist for Ontario drivers (such as packages for usages under six-month plans), some Ontario auto insurance providers appear to be shifting towards innovative programs such as usage-based billing to conform to the shifting consumer model of car sharing and functional vehicle use. This is a significant first step and perhaps opening the window to invite new plans that can suit your driving style and value for your money.

Photo by Caleb George on Unsplash