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.

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