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McLeish Orlando: Nick Todorovic and Danika Winkel, Summer Student

Uber insurance: what drivers and passengers need to know

Written By: Nick Todorovic and Danika Winkel, Summer Student 

Whether you are an Uber driver or a passenger, it is important that you are aware of your level of risk on the road. As a driver, Uber’s automatic policy may not be enough to fully protect you from liability. As a passenger, the amount of coverage that your driver has may ultimately affect how much you can recover for your injuries. The following is a brief look at Uber’s auto insurance plan, so that people sitting in both the driver and passenger seats can become better informed and ultimately, better protected.

Uber’s Automatic Insurance Policy:

In the past, insurers equated Uber drivers to taxi drivers, requiring these individuals to purchase additional coverage and a commercial insurance policy to be rated as a commercial risk. But for most Uber drivers, this did not make sense. The majority of drivers use Uber as a supplement to their primary income, not as a full-time job. Commercial premiums for taxis are based on full time commercial use, whereas over 50% of Uber drivers work 15 hours or less in a week.

Recognizing this, Uber implemented an automatic insurance policy in Ontario through their app in 2016. Uber’s automatic insurance plan can be broken down into four phases depending on the driver’s activity at the time of an accident. You can read more about Uber’s policy here, but for ease of reference, the basic structure of the plan is as follows:

Driver Activity Automatic Uber Coverage
Uber driver is offline
  • Personal insurance coverage in effect.

 

Uber driver is logged into the app and available to accept rides

 

  • Statutory Accident Benefits
  • Uninsured Motorist Coverage
  • Third Party Liability Coverage with limits of $1 million;
  • Family Protection Coverage (OPCF 44R) with a limit of $1 million
  • Collision and Comprehensive Coverages with a $1,000 deductible

 

Uber driver accepts ride request and is on the way to pick up a passenger.

 

  • Statutory Accident Benefits
  • Uninsured Motorist Coverage
  • Third Party Liability Coverage with a limit of $2 million
  • Family Protection Coverage (OPCF 44R) with a limit of $2 million
  • Collision and Comprehensive Coverages with a $1,000 deductible

Uber driver is transporting passenger to their destination.

 

  • Statutory Accident Benefits
  • Uninsured Motorist Coverage
  • Third Party Liability Coverage with a limit of $2 million
  • Family Protection Coverage (OPCF 44R) with a limit of $2 million
  • Collision and Comprehensive Coverages with a $1,000 deductible

You Still Need Personal Auto Insurance:What Does this Plan Mean for Uber Drivers?

Uber’s automatic coverage will only apply you while you are logged into the app. As an Uber driver, you should not expect that your Uber insurance can replace your regular personal auto insurance. Uber’s automatic policy is primarily designed to deal with liability claims which a driver’s personal insurance does not cover. However, without personal auto insurance, certain aspects of the Uber policy may not even apply.

For example, although Uber’s automatic plan provides Collision and Comprehensive Coverage for drivers, this coverage will only apply if the Uber driver also has Collision and Comprehensive Coverage on their personal auto insurance policy. This means that unless you have a personal auto insurance policy, you will not have access to coverage from Uber in the event that your car is damaged while you are logged in to the app.

You May fall into a Dangerous “Grey Area”:

There is a dangerous “grey area” in the Uber policy during which Uber drivers are at the highest level of risk. If a driver gets into an accident when they are logged into the app but have not yet accepted a passenger’s pick-up request, it is likely that the commercial exclusions from their personal auto insurance policy would apply. This means that a driver’s personal auto insurance provider would not provide coverage for any losses or injuries that the driver incurs.

However, Uber’s automatic coverage during this time is also low. If a driver was to get into an accident after they have logged in, but before they have yet accepted a pick-up request, Uber’s automatic plan would only provide a maximum potential coverage of $1 million for losses or injuries; much less than the $2 million potential coverage for accidents occurring when the driver has accepted a ride request or is transporting a passenger. A driver, who is very seriously injured in this “grey area” period, may find that their coverage is inadequate in relation to their loss.

Accidents involving Uninsured Motorists May Cost You:

In the event that an Uber driver is involved in an accident with an uninsured or unidentified motorist and passengers in the Uber are injured, Uber’s automatic plan stipulates that the policy will cover no more than $200,000 for those bodily injuries, regardless of the number of passengers who are injured, and the severity of these injuries.

In addition to this very low figure, this maximum possible amount of $200,000 would have to be pro-rated, or split amongst all of the injured passengers.

In the event that passengers suffer bodily injuries and the Uber driver’s vehicle is damaged, Uber’s automatic plan stipulates that the passengers’ recovery will be even lower. In this instance, only 95% of the total amount payable will be put towards the passengers’ bodily injuries, and 5% of this figure will go towards the damages to the driver’s vehicle.

How to Protect Yourself and Your Passengers: Commercial Auto Insurance

Commercial auto insurance covers vehicles that are used for business or working purposes. Commercial auto insurance would apply in a situation where the exclusions in an Uber driver’s personal insurance policy prevents them from recovering from losses due to physical injury or property damage and Uber’s automatic plan policy is inadequate. Many insurance companies in Ontario are now offering specific “personal coverage for ride-sharing drivers”, a spin-off formulation of commercial auto insurance tailored directly to Uber drivers.

The lawyers at McLeish Orlando recommend that both Uber drivers and their passengers look into the various forms of commercial auto insurance available to them, so that everyone remains protected in the event of an accident.

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