New Auto Insurance Policy For Ontario UberX Drivers

Digitaljournal.com
Sept. 30, 2015

ShopInsuranceCanada.ca tackles the issues drivers are facing when trying to be appropriately insured when working for the UberX service. The company’s unclear insurance model has left many drivers uncovered in the event of an accident, but Shop Insurance Canada says there is light at the end of the tunnel with a new Uber specific auto insurance policy.

UberX has grown in popularity in recent years, allowing consumers to use an app with GPS functionality to locate drivers near them to use as a quasi-taxi service. While the model has been adopted by consumers (surveys show most people welcome Uber) it has come under attack from governments and traditional taxi drivers. In Canada, the city of Toronto is likely to legalize Uber within the region, but still confusion reigns regarding auto insurance and the drive sharing service.

When a new driver signs to become an operative for UberX they need to have the required insurance policy as stated in the company’s "Transportation Provider Service Agreement". This service agreement stipulates that a driver must have sufficient auto insurance to work with Uber, which means a commercial coverage under Canadian law.

If the driver uses a personal auto insurance policy they will not be covered by Uber in the event of an accident, making the company’s $5 million liability coverage pointless for those drivers. However, while Uber does not cover drivers with personal policies, the company does not prevent those drivers from signing up for the service in the first place. Shop Insurance Canada explains the problem thusly:

"Uber is doing the right thing by saying drivers should confirm their involvement with the company through their insurance provider. The problem arises when one realizes that Uber does in fact still accept personal policies from its drivers in the sign up process, knowing that car insurance companies in Canada will not issue policies for P2P transportation companies.

This means the company accepts people using their personal auto insurance without having declared it, something Uber says its drivers should not do in the agreement. In other words, Uber is accepting drivers who it can easily detect are breaching the insurance rules in the agreement. This effectively is laying those drivers out to dry, as they will not get covered by their personal policy and will then not be helped by Uber because they broke the terms of the agreement."

In this situation drivers working for UberX find that they are not covered by the company in the event of an accident, while their own personal policy will also be insufficient. As Uber is not yet recognized as a legal service, it is unlikely that insurance providers would even consider giving commercial auto insurance coverage to UberX drivers either.

Shop Insurance Canada believes there will be significant changes and soon UberX drivers will be able to ensure they are covered by both the company and their insurance provider.

The leading providers of auto insurance in Canada are currently working with Uber to create specific policies that would specialize in providing coverage for UberX drivers. The fine details of the policies have not yet revealed and are likely waiting for UberX to be considered a legal service, something that is happening in Toronto during October, 2015.

That means in the near future UberX drivers will be able to have private auto insurance that takes into account their role with the service, a specialized commercial coverage. With adequate insurance that meets Uber’s terms of service, the drivers will also be covered by the company’s own $5 million liability coverage.

Luke Jones is a journalist professional at ShopInsuranceCanada.ca, Canada’s authoritative expert in car insurance news, information, and rates. Compare quotes from up to 15 different car insurance providers in minutes.