Uber and Insurance: The facts

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 progress of the ride 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 currently offers low-cost options for navigating large and busy cities in over 40 countries. Recently, Uber has 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 result in cancellation of the personal insurance policy.

However, each insurance company follows its own policies and complies to the regulations of the province it operates in. 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 has announced changes to their insurance policy. According to the company, the current policies that have been in place since July 2014 provide comprehensive and collision coverage, as well as 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, as well as 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 for providing ridesharing services.

Norm Assiff

Norm Assiff

Norm was awarded the Alberta Civil Trial Lawyers Association (ACTLA) President's Award for 2012--awarded to a member of the Alberta bar who has distinguished himself or herself by his or her contribution to the profession or the community, the advancement of the law or their service to ACTLA. He has appeared at all levels of court in Alberta (Provincial Court, Queen's Bench and the Alberta Court of Appeal) as well as the Supreme Court of British Columbia and the Federal Court of Appeal.

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The information presented on this post is not legal advice. We encourage you to perform further research on the topics described here, and if you have any questions or would like to speak to one of our personal injury lawyers, please do not hesitate to contact us.