Ride Sharing

Uber and Insurance: The facts

Does insurance cover uber drivers? Find out what your insurance will and won't allow

Amidst controversies, Uber has announced its expansion in major cities in Canada. The company is looking to expand in provinces like Alberta, British Columbia and Ontario and has started recruiting ridesharing drivers in major cities like Calgary, Vancouver, Toronto and Ottawa. However, according to CBC, the Insurance Bureau of Canada has warned Canadian ridesharing drivers of the potential liability risks of carrying passengers for payment.

What is Uber?

Uber is a San Francisco-based technology company that offers matchmaking services between riders and drivers. Much like a taxi service, the ridesharing app-based service allows users to request or provide a ride for a relatively low cost. Users (both riders and drivers) can see each other’s profiles before agreeing to offer or accept a ride. They can also track the ride’s progress via the app and pay electronically for the service.

Who can offer rides?

Uber offers three main types of on-demand services, for which drivers need different qualifications. Both UberTAXI and UberBlack services are provided by commercially licensed and commercially insured drivers. On the other hand, UberX ride-sharing is provided by any individual who is “at least 21 years old, with a personal license and personal auto insurance, and who owns any mid-size or full-size 4-door vehicle, in excellent condition.”. The ridesharing service offers low-cost options for navigating large, busy cities in over 40 countries. Recently, Uber expanded in Canada and is recruiting ridesharing drivers in Alberta, British Columbia, and Ontario.

What insurance do you need to drive for Uber?

In Canada, the personal auto insurance coverage that most UberX drivers have does not cover collision or passenger injuries in case of an accident during a commercial activity. According to the Insurance Bureau of Canada, carrying passengers for payment could void drivers’ insurance policies. In some cases, engaging in commercial activity (i.e. transporting passengers for a charge) without proper commercial insurance coverage may also cancel the personal insurance policy.

However, each insurance company follows its own policies and complies with the regulations of the province in which it operates. It is highly recommended that drivers be cautious when signing up for any ride-sharing service and consult with their insurance provider on the kind of insurance policy required for such activities.

What insurance does Uber provide?

In a recent blog post, Uber announced changes to its insurance policy. According to the company, the current policies that have been in place since July 2014 provide comprehensive collision coverage and liability coverage up to $1 million/incident. The liability policy covers bodily injury or property damage to ridesharing drivers from the moment they accept a trip to its conclusion and to the passengers or any other third parties, such as pedestrians, other vehicles, buildings, etc. The comprehensive and collision are covered under a separate policy, which provides up to $50,000 contingent coverage in case a driver’s personal insurance doesn’t apply in the event of an accident. Finally, the company has also announced a contingent between trips insurance coverage, which, according to the website, “will only pay if the personal auto insurance completely declines or pays zero”.

In any case, the company operates differently in different jurisdictions, and as such, it is recommended that drivers consult with professionals to decide on the type of insurance they need to have to provide ridesharing services.

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