About a year ago, I was speaking with a friend who had started driving for UberX. I asked my friend whether his automobile insurer was aware of his ridesharing activity. I pointed out to him that the standard automobile insurance policy in Ontario excludes taxis and drivers with paid passengers. Following our conversation, my friend contacted his personal insurer to inquire about coverage for ridesharing activity. He asked his insurer whether his insurance costs would rise if he was ‘hypothetically’ driving for UberX. He was told that his rates would not increase because his policy would be voided immediately!
Up until recently, the entire Uber universe in Ontario (its various products include UberX, UberXL, Uber Select, UberHop and UberPool) has operated largely unregulated. However, recent developments will offer some assurance to Uber drivers, passengers and the public when it comes to insurance coverage in Ontario.
On July 7, 2016, the Financial Services Commission of Ontario approved an automobile insurance policy through Intact Insurance Company that covers all Uber drivers, passengers and vehicle owners. The policy provides standard accident benefits and third party insurance coverage from the moment the Uber application is turned on by the driver.
Uber drivers and owners will automatically have insurance coverage commencing the moment the Uber application is turned on in their vehicle. The third party coverage is limited to $1,000,000.00 from the time the application is turned on until the time the driver accepts a trip. The coverage increases to $2,000,000.00 from the time a trip is accepted until the passenger exits the vehicle. Once the passenger exits the vehicle, the third party coverage again returns to $1,000.000.00 until the next trip is accepted by the Uber driver. The coverage applies across the entire spectrum of Uber products.
One thing to keep in mind is that Uber drivers/owners are not covered under the Intact policy when the Uber Application is turned off (i.e. when they are using their vehicle in their personal capacity).
This means that all Uber drivers/owners must notify their personal insurer of their participation in the ride-sharing service, as the driver/owner may otherwise be in breach of their policy. It is not clear how the personal insurer will respond to this information as insurers are not required to insure Uber drivers/owners and may increase rates, elect to cancel, or not renew the policy of Uber drivers/owners depending on how they view the risk.
Drivers/owners who do not notify their personal insurer of their Uber activity run the risk of having their personal insurance coverage voided, if the insurer becomes aware of their activities. If an accident were to take place in such circumstances, these drivers/owners will likely find their insurers denying them coverage. In those circumstances, the insurer will still be required to respond to the third party claims of those injured in the accident up to the minimum required insurance limits in Ontario of $200,000.00. However, the insurer will then retain the right to claim any amounts paid, back from the driver/owner who did not make full disclosure, and was therefore not properly insured. Uber drivers/owners will want to avoid this risk by immediately contacting their insurers.
Passengers in an Uber vehicle (who purchased their ride using the Uber application) and pedestrians should be protected under the Intact policy. However, passengers and pedestrians should keep in mind that this coverage will be limited to the standard protection offered by Intact. In some cases, this protection may need to be shared with others passengers/pedestrians. For instance, the third-party coverage may need to be shared among several individuals in the case of a serious collision involving an Uber vehicle.
Furthermore, if there is an accident involving an Uber driver operating in his/her personal capacity (without having notified his/her insurer and thus losing coverage) those accident victims will only have access to the $200,000.00 minimum insurance limits, which might have to be shared among several victims.
The public can protect itself against such insufficient insurance limits by purchasing underinsurance coverage, from your own insurer, at a modest cost. Underinsurance coverage allows you to claim insurance benefits under your own insurance policy if you are injured by a third party who has insufficient insurance coverage or is not insured altogether. As long as the coverage purchased under your own policy is greater than the amount of insurance available from the driver/owner, you will be able to access the full amount of your personal coverage.
Another way the public can protect itself is by purchasing optional accident benefits insurance coverage. Optional benefits are benefits over and above the standard accident benefits protection. Optional benefits are not included under the Intact coverage insuring Uber. There has been a recent drastic cutting of the standard accident benefits in Ontario (the details of which have been covered in other ABR Articles) and as a result, all motorists in Ontario should consider purchasing optional accident benefits. Like underinsurance coverage, these additional no-fault accident benefits can typically be purchased for a modest cost. The enhanced optional benefits enable you to increase the benefits available to you from the current amount of $65,000.00 for non-catastrophic injuries (for medical/rehabilitation and attendant care) to as much as $1,172,000.00 (and even greater amounts for catastrophic injuries).
In summary, the insurance coverage now available to Uber drivers/owners and passengers will provide some protection when using the Uber service but the following is still recommended:
- Uber drivers/owners must notify their personal insurers of their ridesharing activity;
- The public should ensure they have appropriate underinsured coverage under their own policies which can be purchased at a modest cost; and,
- The public should ensure they have appropriate optional benefits coverage under their own policies which can also be purchased at a modest cost.
View article in PDF format: Your Uber Ride Is Now Covered By Insurance But Further Coverage is Recommended