Uber – A Game Changer for the Insurance Industry

Uber - Changing the Insurance and Taxi industriesThe whole “Uber” phenomenon is very interesting to insurance nerds because it shows how a simple computer app can totally change a cornerstone of our industry.

Here’s the issue: Since the beginning of time, personal auto insurance policies in Ontario have always had the clause that you cannot use you vehicle for “compensation or hire”.

Generally, if you do need to use your personal vehicle for “compensation or hire”, you required a commercial insurance policy.

Over the years, the industry has developed a “business use” rating for situations when, as example, a real estate agent uses their vehicle in the course of their employment or a young person delivers pizzas in their own vehicle. These situations technically violate the “compensation or hire” clause but insurance companies quickly determined figured out that they could charge a bit extra premium for the business use risk and not have to go with a commercial policy.
In the past, if you wanted to use your personal vehicle as a part time cab, that was a huge no-no. You would have to get cab insurance and the cost could be in the range of $10,000 to $12,000 per year.

Then along came Uber…and we see people that are not really using their vehicles as cabs but then using it for much more than business use. Interestingly, rather than running away from this, most big insurance companies are trying to figure out how to properly insure people who want to be Uber drivers.

Aviva insurance has been the first to come out with an endorsement that can be added to your policy so that you can be an Uber driver for up to 20 hours per week.

What I find very interesting is that the insurance companies are rushing towards the issue rather than away, it’s a good example how they are anticipating and trying to capitalize on market changes rather than burying their heads in the sand.

If you are or know of an Uber driver, please feel free to reach out to me to discuss your unique insurance needs: 519-739-8228

New – Ride Share Insurance Coverage

Ride Share UberX Insurance Windsor OntarioRide sharing has overtaken the traditional taxi industry and is now available with UberX in the Windsor and Essex County area.

Due to the rise of ride sharing services, there has been a serious gap in protection and benefits for drivers carrying passengers in their own vehicles – until now.

In February, Aviva Canada will launch coverage for drivers involved in ride sharing services.

Ride Share Insurance – What you need to know:

  • The coverage is an addition to an Aviva personal auto policy.
  • Eligibility for coverage will be based on some simple underwriting criteria, such as a maximum of eight passengers, licensed for a minimum of six years, etc.
  • The coverage will protect ride-sharing drivers from the moment they initiate looking for passengers through to collecting and dropping off those passengers.
  • The coverage will be available for drivers who¬†spend up to 20 hours a week participating in ride sharing.
  • The cost for the additional coverage will equate to a small portion of the income earned by the driver, calculated using factors such as time spent ride sharing, area driven and driving record.

This coverage is important for both the driver and their passengers. If you or someone you know is contracted by a ride sharing company, please contact us for a quote today: 519-736-8228