Uber insurance comes with fresh pitfalls
‘ There are going to be gaps in coverage’
Uber may have been a breech birth — feet first, head last — but it is most definitely moving mainstream and finally bending to all those silly laws it was so intent on breaking.
Make no mistake; many of those laws have had to do some gymnastics to acknowledge that people — rideshare users, not just the providers — were going to do it anyway. Many will call it an uprising or revolution; I still call it a company that broke rules and endangered customers and drivers alike, and I’ll still never use them. I can be stubborn, too.
Two things happened almost simultaneously: I started noticing advertising for Uber drivers on TV, and then it was announced that, finally, all people using Uber in Ontario and Alberta would be covered by insurance the moment they stepped into an Uber car. More on that development in a moment.
First, the ads. I heard a wistful man’s voice listing off the reasons for using an unnamed product. I thought it was for some erectile dysfunction meds, because they, too, always start out wistful and end up thankful. Then at the end they tell you to be an Uber driver to make all your economic dreams come true. Uber also said way back in 2014 that its intention was always to replace all the drivers with automated cars, so I think it left a critical line out of its warm and fuzzy message: Come work for us until we don’t need you anymore, and that will be as soon as we can make it happen.
In April, Arianna Huffington, of the Huffington Post, joined the Uber board. She’s good at this; she doesn’t pay her writers, so I found the irony a bit rich that she’ll be helping a company that ultimately wants to not have to pay its drivers. You can put in your “scorpion giving a frog a piggyback ride” story right about here.
Uber started out flouting laws. It ran roughshod over the cab industry by undercutting fares and flooding the market with “drivers.” That’s in quotes because Uber drivers only had to prove they had a newish car and were willing to work stupid hours (called “flexible”).
The biggest i ssue has always been insurance. It wasn’t until two months ago that an insurance product even existed in Canada — with Aviva — that could provide Uber drivers with the coverage they need to be using their cars to earn in- come. Previously, standard policies did not stretch to become commercial ones without an appreciable bump in rates that was many times normal annual fees. Drivers simply skirted the issue by failing to inform their insurance providers that they were now acting as a livery service — which basically voided their policies.
Uber did that whistling and looking sideways thing because hey, it had dotted its “I”s and crossed its “T”s in its fine print, and used better sleight of hand than David Copperfield to pretend its own insurance covered its drivers. It didn’t. Cowards.
Until now. Uber has finally, in Alberta and Ontario, secured a policy with Intact Financial that protects riders and drivers from the moment a ride is arranged until it is completed. Awesome, right? Well, hold up. Drivers still do have to notify their personal car insurance companies that they are driving for Uber, but the work portion of their car usage is now covered under the Uber/ Intact policy. The devil, of course, is in the details.
From Sound Insurance broker Debbie Arnold: “The edict from Intact is that if the client is insured outside of the Intact family ( Belair, Novex, Jevco), they must advise their personal automobile i nsurer t hat the vehicle is used for Uber, and Intact is picking up the usage as soon as the driver accesses the Uber app. The problem is that this is new to the industry and we don’t know how the courts will react in the event of a serious claim. However, Intact says that the liability limit is $ 2,000,000 once the passenger is picked up, the deductible is $ 1,000 ( if they purchased physical damage coverage on their personal policy, and if on that personal policy the deductible is $ 500, the driver is on the hook for the $500 deductible difference), but they are only providing standard accident benefit coverage ( so if the driver purchased maximum buy- ups for med/rehab and attendant care, that additional coverage will only apply when the vehicle is used for personal purposes, not while driving for Uber). There are going to be gaps in coverage here even when the driver informs their personal carrier, because there are loopholes.”
The short t ake- away? This is great news for consumers. It’s good for drivers who understand the limitations of the improvement — but the cost of this will come from somewhere, and I’m guessing it’s not Uber’s cashmere- lined pockets or those riders they want to keep bribing with undercut pricing.
Yup. It’s the drivers who will bear this. Until, of course, there are no drivers at all.