Geico targets Uber drivers with ridesharing policy

Geico is introducing a new ridesharing insurance policy across the U.S. aimed at Uber drivers - but would it work here?

“We want to insurer Uber drivers,” Geico CEO Tony Nicely told Fox Business News.

The resistance in Canada to Uber has centered on the lack of adequate insurance coverage for drivers – particularly those who are driving under their own personal policy, and not a commercial one.

And beyond that, insurers would be asking questions should an accident occur, and the relationship between the driver and the passenger.

Pete Karageorgos, director, consumer and industry relations for Insurance Bureau of Canada, said that while the Bureau doesn’t like to tell people what they should or shouldn’t do, the only way an insurance company would pay out a claim like this is if the driver has his or her own commercial insurance coverage.

One of the first questions the person would be asked by their insurance company would be who was in the car and how they knew that person. If the claimant revealed that it was someone they were transporting in exchange for payment, it wouldn’t be covered.

The Geico ridesharing policy has been launched in Virginia, and has been approved in Maryland, with an eye to expand it in other U.S. states.

The ridesharing product is available now to new and existing customers and covers drivers that Uber (UberX and UberXL), Lyft, Sidecar and others have approved to drive for them.

In Toronto, Ont.,  taxis are required to have commercial coverage and carry a minimum of $2 million in liability insurance.

City staff recently cited inadequate insurance that “might not provide essential coverage to drivers, passengers and others in the event of accidents,” as one of the reasons it is seeking an injunction for Uber to stop its operations.

A court date is scheduled for May.

Geico’s ridesharing product replaces the driver’s personal auto policy and provides coverage both for personal and ridesharing use. Geico will offer the product through Geico Commercial at a price significantly lower than taxi and commercial rates.

According to Nancy Pierce, Geico regional vice president, the product will offer ridesharing drivers a complete product so they do not have to worry about how to report a claim, and if they chose the coverage, whether their car will be fixed and whether they’ll have medical coverage.