UberX insurance is a black-and-white issue

Media release

June 29th, 2015

Zero shades of grey:insurance coverage for UberX drivers

Is a black-and-white issZero ue


June 29th, 2015 (Toronto) -- To your Ontario auto insurance company, carrying paying passengers falls into the same troubling category as carrying explosives or radioactive materials.

Unless you have an OPCF 6A Endorsement as part of your auto insurance policy, you are not insured to carry paying passengers, states Philomena Comerford, President & CEO of Baird-Macgregor insurance.

“It’s a very specific endorsement. That’s what you need. This is the endorsement for which taxi drivers pay dearly; without it, your insurer can deny your claim,” she says.

“Technology does not trump the law. To the insurer, it does not matter if the car was dispatched using an app or dispatched using a telephone. If you’re making money from it, you are carrying paying passengers. Period, full stop. It’s black and white; there are no shades of grey.”

Comerford, a specialist in auto insurance, is gravely concerned that Ontario drivers have gotten the impression that they can work for so-called “ridesharing” organizations like Uber and Lyft with only the personal insurance policy they put on their car.

“People are getting into it thinking ‘Oh, it’s like delivering pizza! I’m going to be an UberX driver!’ They do not understand that they could lose everything they own. If they get involved in an accident and there’s no coverage; they could get a judgement against them putting all of their personal assets at stake plus they could face charges for not being properly insured.”

Uber, she says, “is trying to introduce a thousand shades of grey to something that’s black and white.”

Indeed, section 3 of Ontario’s OAF 1 Standard Auto Insurance application asks this very straightforward question:

“Will any of the described automobiles be rented or leased to others, or used to carry passengers for compensation or hire, or haul a trailer, or carry explosives or radioactive material?”

The answer to this question is either “yes“ or “no.” If the applicant answers “yes” to this question, he or she will almost certainly be declined for personal coverage and will instead be referred for a commercial policy.

If the applicant answers “no” to this question and then proceeds to carry passengers for money, the insurer can take the position that there was either misrepresentation or non-disclosure; potentially facing up to a quarter million dollar fine or even jail time for misrepresentation.

“The problem is that everybody is unaware.  It’s been hard getting people to see how important it is. The fact that the City of Toronto is ignoring the insurance issue is maddening: none of these people are properly insured! Injured UberX passengers, pedestrians, cyclists or other motorists could find out the hard way about personally insured UberX vehicle coverage gaps. Toronto has jurisdiction over municipal taxi licensing regulations, but not the provincial Insurance or Highway Traffic Acts.”

The issue of insurance for Uber drivers is now in the spotlight, owing to an accident which took place on June 3rd in Toronto when an Uber car carrying paying passengers apparently ran a stop sign and plowed into a Diamond cab. The Diamond cab is insured with an OPCF 6A Endorsement; the driver of the Uber car had a personal policy with DesJardins.

Joe Daly of DesJardins was quoted in the media after the accident stating, “DesJardins does not insure Uber drivers. We do not insure taxicabs. We do not offer commercial policies in Ontario.”

Comerford points out that a good deal of the confusion has resulted from the fact that Uber holds out an SPF 6 policy as “coverage” for its drivers.

“An SPF 6 provides non-owned auto liability coverage, and there is absolutely no connection between that and the OPCF 6A,” she says. “The purpose of an SPF 6 policy is to protect a corporation whose staff or others use their cars on company business. It does not provide primary coverage; nor does it meet the financial responsibility requirements of the province of Ontario. The critical endorsement is the OPCF6A, Permission to Carry Paying Passengers which must attach to an Ontario Auto Policy OAP #1- Owner’s Policy.”

“Without it, an UberX driver could lose everything they own in the event of an accident.”





Media wishing to interview Philomena Comerford can call Mary Valvano

Tel 416-778-8000 ext 2269

Backgrounder:  Risks of Misrepresentation

What is the risk of misrepresenting yourself to your auto insurance company – for example, declaring in Section 3 that your automobile will not be used to carry paying passengers, when in fact you are carrying paying passengers? The possible ramifications are significant, and they are printed on every insurance application[1]:

  • Warning - The Insurance Act provides that where: (a) an Applicant for a contract, (i) gives false particulars of the described automobile to be insured to the prejudice of the Insurer, or (ii) knowingly misrepresents or fails to disclose in the application any fact required to be stated therein; or (b) the Insured contravenes a term of the contract or commits a fraud; or (c) the Insured wilfully makes a false statement in respect of a claim under the contract, a claim by the Insured, for other than such statutory accident benefits as are set out in the Statutory Accident Benefits Schedule, is invalid and the right of the Insured to recover indemnity is forfeited.
  • Warning – Offences It is an offence under the Insurance Act to knowingly make a false or misleading statement or representation to an Insurer in connection with the person’s entitlement to a benefit under contract of insurance, or to wilfully fail to inform the Insurer of a material change in circumstances within 14 days, in connection with such entitlement.
  • The offence is punishable on conviction by a maximum fine of $250,000 for the first offence and a maximum fine of $500,000 for any subsequent conviction.
  • It is an offence under the federal Criminal Code for anyone to knowingly make or use a false document with the intent it be acted on as genuine and the offence is punishable, on conviction, by a maximum of 10 years imprisonment.
  • It is an offence under the federal Criminal Code for anyone, by deceit, falsehood or other dishonest act, to defraud or to attempt to defraud an insurance company. The offence is punishable, on conviction, by a maximum of 10 years imprisonment for fraud involving an amount over $5,000 or otherwise a maximum of 2 years imprisonment.




[1] Source: Ontario OAF1 application form

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The source

The Insurance Bureau of Canada has a confidential Tip Line which you can call to report Uber drivers in Toronto.

If you see a car you know to be or believe to be an Uber car, call 1 877 422 8477 and provide the car's license number to IBC. The driver of that private car can face cancellation of their insurance policy by their insurance carrier.

You are not required to leave your name or contact information.

Insurance Bureau of Canada confidential tip line: 

1 877 422 8477

Drivers in Uber-insurance trouble

Rita Smith

June 4, 2015

The question of whether an UberX driver can count on his or her private insurance policy to cover them in the event of a business-related accident is now being clarified for aspiring Ontario Uber drivers.

Around 3am June 3, police attended a Toronto accident in which a woman working as an UberX driver with fares in the car apparently ran a stop sign, and slammed into Diamond taxi cab #2201. The woman driving the Uber car was charged and ticketed.

Both cars were carrying paying passengers; individuals from both cars were sent to hospital.

The Diamond taxi is covered, as required by law, by commercial insurance.

The driver of the Uber car reportedly has a personal policy with DesJardins Insurance; however, this policy does not cover drivers transporting fares for money.

Shoaib Muhammad’s 2014 Toyota Camry, cab #2201.  “Uber is completely illegal. We pay insurance, license fees, our drivers are trained… and yet Uber is allowed to operate. In Ottawa and Vancouver and around the globe they have been stopped, but in Toronto they are supported. They are killing the legal taxi industry in Toronto! … We have everything, we have cameras in the cars, and we obey the by-laws. Those people, you never know what they are doing.”

Shoaib Muhammad, the owner of cab #2201 (“A 2014 Toyota Camry!” he says mournfully) is outraged by the fact that Uber is allowed to operate without regulation. “These kinds of things happen in the third world, not in Toronto!”

“DesJardins does not insure Uber drivers,” says Joe Daly, spokesperson for the DesJardin Insurance Group. “We do not insure taxicabs. We do not offer commercial policies in Ontario.”

If you are injured in an accident in Ontario, Pete Karagerogos of the Insurance Bureau of Canada stresses, medical costs will be covered by the province’s health care system.

“The real challenge is for the actual damage to the vehicle. If you are using your vehicle in a way that contravenes the conditions of your policy, then coverage may not apply,” Karagerogos told Landmark Report.

“When you are taking out private passenger insurance for your vehicle, within the application process, there are specific questions you are asked: for example, whether you are transporting dangerous substances; or whether you are going to be carrying passengers for hire. If you answer ‘yes, I’m going to be carrying passengers for hire’ then in effect you are saying that you are going to be carrying on a business for commercial purposes, and you should have commercial coverage.”

The challenge for Ontario drivers hoping to make extra income through so-called “ride-sharing” services remains that in the province of Ontario, there are two distinct types of insurance: personal and commercial. There’s no blend of the two types of coverage in Ontario.

“If you misrepresented yourself, the insurance company could say, ‘That’s a material change in facts.’ The insurance company could cancel your policy; you basically misrepresented yourself, unless you told your insurance company you will be carrying fares for payment, and are properly insured under a commercial insurance policy, which is what taxis and other vehicles which are used to carry people for hire have.

“In some jurisdictions in the US – two places – they have a hybrid policy. There is no hybrid policy in Ontario at present. In Ontario, it’s basically one or the other.

“If you are looking at changing the use of your car – or your residence for that matter – always, always, always talk to your insurance representative,” Karagerogos advises.

Financial Service Commission of Ontario’s advice on “ride-sharing”

  • Ride-sharing: the typical Ontario policy excludes coverage when the automobile is used to carry paying passengers or used as a taxi.
  • You may not be protected against certain damages, losses or liabilities – know if you’re covered. Ask your driver. (Editor’s note: this is a ludicrous suggestion, FSCO. Drivers are not insurance specialists and few know the details of their own coverage.)
  • If you are intending to participate in a ride-sharing service as a driver, you should check with your auto insurance representative to ensure you have proper insurance that protects the driver, passengers and others.
  • It’s also a good idea to seek independent legal advice before you sign on.

See more here  

TTA thanks Justice Dunphy at close of Uber court hearing


June 3 - Toronto - The Toronto Taxi Alliance (TTA) wishes to thank Mr. Justice Sean Dunphy of Ontario Superior Court of Justice for hearing the City of Toronto’s requested injunction to prevent the Uber group of companies from acting as an unlicensed taxi service.
Gail Souter, President of the TTA, points out that Toronto’s taxi industry has long been a supporter of innovation which acknowledges the importance of regulation and safety.
The Toronto Taxi Alliance supports innovation and encourage new technologies which will improve service and the competitiveness of Toronto’s taxi industry. However public safety is paramount. 
“Riders like taxi apps, which is why several Toronto taxi services including Beck, Diamond, Royal, Co-op and City Taxi all offer smartphone app hails. This is not exclusive to Uber,"  Souter says. 
Unfortunately Uber is telling riders that UberX cars are covered by commercial insurance, while insurance companies say this is absolutely not true.
"In a regulated Toronto taxi cab, the drivers are trained and licensed, and their cars are properly insured. Toronto’s taxi firms support innovation and competition; all we ask is a level playing field. Our members, who have been working and investing in good faith while following Toronto’s taxi regulations, want to see Uber and other similar companies working according to the same standards," Souter points out. 
"This is safer for riders and the public."

Tip line to report Uber drivers to the Insurance Bureau of Canada


The Insurance Bureau of Canada has a confidential Tip Line which you can call to report Uber drivers in Toronto.

If you see a car you know to be or believe to be an Uber car, call 1 877 422 8477 and provide the car's license number to IBC. The driver of that private car can face cancellation of their insurance policy by their insurance carrier.

You are not required to leave your name or contact information.

Insurance Bureau of Canada confidential tip line: 

1 877 422 8477