Uber Canada recently revealed the details of its heretofore undisclosed $5 million supplementary insurance coverage, and brokers nationwide are dismayed over its contents.
“It’s a standard non-owned auto policy,” said Philomena Comerford, CEO of Baird MacGregor Insurance Brokers LP. “It is intended to protect Uber in the event that they’re brought into an action, but it doesn’t fix the inadequacies of the personal auto policies that UberX drivers are using and relying upon.”
Comerford believes that Uber tries to complicate the issue by calling themselves a “ride-sharing service” and refusing to consider its drivers “employees,” but the solution is nonetheless straightforward – and circumvented, due to its costliness.
“The fix for this is quite simple – if you’re carrying paying passengers, you need to file for the OPCF 6A endorsement,” she said, referencing the standard facility quotation. “Uber has led the world to believe this is requires some sort of a newfangled policy, but the fact is, the solution is as old as dirt.”
She adds that “the use of obfuscating language like ‘ride-sharing’ is irrelevant because the auto policy is quite clear and has been, as long as I’ve worked in the business.”
While Uber continues to flout its insurance requirements, the consequences for its individual drivers can be staggering.
First, they face irreparable financial damages if they’re involved in a collision while using UberX and don’t have the Permission to Carry Paying Passengers endorsement.
“The very first thing a claims professional would do is ask for the driver contract. If the driver contract says that the driver is responsible for insurance and is holding Uber harmless and indemnifying them, the outcome could be dire,” Comerford said.
Moreover, UberX drivers who are caught lying on their auto insurance application forms could face such repercussions as a $250,000 fine and imprisonment.
“It doesn’t happen too often, but it could. It there’s a huge loss, they might throw the books at you to set an example,” she said.
She continues to state that it’s “unconscionable” that Uber would allow such passengers as athletes visiting Toronto for the Parapan Am Games to be exposed to these dangers. In addition, Uber’s target demographic is particularly vulnerable, given their age and personal background.
“Think of the type of person who uses UberX: they’re likely living in a condo and decided they don’t really need a car, so they might not have an auto policy to rely upon for no fault benefits,” she said. “If something goes wrong with the UberX policy, they’re in trouble.”
This contentious issue has now escalated to the point of being farcical and outrageous, as evidenced by recent news that an “angry” Toronto councillor confronted an UberX vehicle to warn its passenger that she was putting herself in danger by entering an underinsured car.
While the representative’s actions may be somewhat over-the-top, Comerford does encourage brokers to be more vocal about this coverage gap, since the alternative could result in substantial future backlash.
“It would be embarrassing for the industry if all of a sudden there was a sudden rash of claims and then everybody said: why wasn’t the industry warning us about this?,” she said.
