In an effort to keep costs down, many Uber operators do not tell their personal insurance companies that they are participating in the ridesharing enterprise. Commercial policy premiums can cost three to ten times more, so it is no surprise that those lured by the income earned driving for Uber shy away from the increased premiums.
The information offered by Uber is at odds with the insurance industry stance that driving for Uber is a commercial enterprise and needs to be disclosed to insurers for policies to be valid. A Buzzfeed reporter attending an Uber promotional event in Los Angeles reports that Uber representative Alanna Noss unequivocally stated “You don’t need commercial insurance. When you’re on an Uber trip, you’re covered with us.”
INSURERS, HOWEVER, HAVE REFUSED CLAIMS ARISING FROM ACCIDENTS THAT HAVE OCCURRED DURING UBER RIDES.
Part of the problem arises during the time that Uber operators are trolling for fares. Uber’s insurance coverage kicks in once the fare is in place, but until that time, drivers must rely on their personal policies. Personal policies may, however, refuse coverage since the driver is engaged in a commercial enterprise before engaged with a fare.
While the facts uncovered in the BuzzFeed investigation derive from California, it is clear Canadian insurers remain concerned as well. For Ontarians contemplating driving for Uber, or hitching a ride with an Uber operator, caution is warranted until the rules regarding this new industry, and how its risks are managed and covered through insurance, are made clear.