Online-based ridesharing has been growing by leaps and bounds across the world and entered the Canadian market in a serious way through 2016. While the ride-sharing parent organizations – of which Uber is the most prominent – offer liability coverage to protect the users of their informal fleets, insurance on the cars used themselves isn’t tightly regulated, relying on the diligence of the ride-sharing companies to ensure drivers have commercial rideshare insurance.
What are the requirements? Does a personal car insurance policy apply to ridesharing use? Here, we look at the answers to those questions and the resources available to rideshare drivers in Canada.
Using a personal vehicle for ride sharing
With the growth of rideshare services such as Uber and Lyft, special insurance products designed specifically for ridesharing purposes emerge. These are not, however, offered by every insurance company. This is a special commercial application, and therefore it has different coverage based on commercial rideshare use.
A driver cannot simply begin rideshare participation with standard personal auto insurance in place. A regular policy doesn’t cover the additional mileage added to serve the rideshare market, nor liability for paying passengers. Since, by its very nature, ride sharing keeps a car on the road longer while driving further, a car used for ridesharing is more likely to have an accident, compared with a similar vehicle restricted to personal use only.
Misrepresenting the insurance status of a vehicle is a dangerous practice. Since the driver is violating the terms under which a personal auto policy is issued, they may be left hanging by their insurance company if ride-sharing use is uncovered.
Ride Sharing Insurance Products
Intact Insurance introduced a ride-sharing insurance product in early 2016 in Ontario, since Uber was making a big push in Toronto at the time. As of July of that year, the rideshare giant began purchasing ride share policies to cover its drivers, provided that they had their own personal insurance on the vehicle.
The Intact/Uber policy provides:
- $2 million in third-party liability
- Statutory accident benefits
- Direct Compensation-Property Damage coverage
- $2 million in uninsured/unidentified motorist protection
These four sections meet and exceed the statutory requirement for minimum coverage in Ontario. In addition, the policy includes:
- Collision and Comprehensive coverage on contingency – this coverage only applies if the ride-sharing driver maintains the same coverage on personal insurance, which applies when their vehicle is used for non-ride sharing purposes.
- Between trip coverage – when Uber rideshare clients are not in a driver’s vehicle, but the driver is available for rides through the Uber app, they are “between trips” for insurance purposes, and the Uber policy provides coverage in reduced amounts during that time.
Disclosing Ride Sharing Status
While Uber’s adoption of the Intact product should reassure personal insurers that the associated risks of ride-sharing drivers won’t fall to them, disclosing ride sharing use is still required. It may or may not affect personal insurance premiums for the ride-sharing driver. This insurance market is still in its early days and much about the service is in flux.