Don’t lie to your insurance company
TAXI TIPS: When it comes to working with services like Uber, you can’t afford to ignore the fine print
“Uber drivers can use the HOV lanes,” read the headline. Then the sentence continued: providing they have three or more occupants, just like everyone else. So close, Uber, so close.
The trendy hire-a-drive app that puts a car at your fingertips in many parts of the world just can’t seem to catch a break. Does it deserve to?
The Pan Am Games opened Tuesday in the Toronto region, promising to swirl the already catatonic gridlock further down into the depths of hell. I’m sure more than a few Uber drivers were parsing the fine print that allows taxis and airport limos to use the coveted high-occupancy vehicle (HOV) lanes, now temporarily drawn on an additional 185 kilometres of major highways around the Greater Toronto Area. That’s in addition to the existing 50 permanent kilometres. In the eyes of the law, Uber still hangs in a no man’s land.
This article started out as a stunt piece: I was going to simply become a Uber driver for a day and report back. A call to my insurance broker simply ground that idea to a halt and fast — even hinting it would cost me my private car-insurance policy — a risk I can’t afford to take. A quick pivot sent me to Twitter looking for an existing Uber driver who would let me ride along; after an initial encouraging phone call and a few email exchanges, he went to ground, never to be heard from. Guess having his name in the paper was too much of a risk.
I couldn’t even get someone to play along with a black bar across their eyes and a voice scrambler. Uber sells itself as a great way to make easy money if you own a car. You must be 21 with a full licence, own a fourdoor car less than 10 years old, pass a background check they pay for and have valid car insurance.
Therein lies the rub for prospective Uber drivers. “Will any of the described automobiles be rented or leased to others, or used to carry passengers for compensation or hire, or haul a trailer, or carry explosives or radioactive material?” Every insurance company in Canada uses forms that carry some version of this sentence. So if you check “no” and then sign off on the application and then start accepting fees for ferrying people (or pizzas) around, you could be committing fraud.
A recent Forbes survey published in the U.S. found “… while the vast majority of respondents — almost 70 per cent — say they plan to purchase a policy in the future, a disturbing 84 per cent say they do not tell their insurer or their agent/broker about their ridesharing activities.”
For Uber, your responsibility rides on your personal insurance and if damages reach past your limits, their own insurance will kick in. Uber knows you’re driving for Uber; there’s a good chance your insurance company does not unless you notified them, which can work out one of two ways:
You call your company and ask innocently if considering being an Uber driver could affect personal insurance. They could cancel your insurance or at the very least start investigating it because now they know what you’re doing;
Or they can offer to sell you the proper product for what you’re considering, which is commercial coverage. This could be, maybe, three times your current rate.
So there’s a chance some won’t call their insurance company and if that Forbes survey is even close to accurate, the chance is most won’t. Who can remember ticking that box so many years ago? Besides, if I start delivering pizzas, I’m hardly going to have to call my insurance company, right? Actually, your insurer does need to know that you — or anyone in your household with access to your car — is delivering pizzas. Or flowers. Or Uber clients. I know, pizzas and passengers are different.
“Insurers know pizzas aren’t passengers,” says Pete Karageorgos of the Insurance Bureau of Canada. “Our job is to match policy to risk; it’s critical that you inform your provider of any material change to that risk and be transparent about it.”
If you’re not, in the event of a crash, insurers can opt to deny the claim, leaving you at the mercy of someone like Uber’s Internet promises. They could also decide to cover the claim, but then back-charge you the premium you should have been paying. If payouts to drivers using their vehicles commercially are pooled with my non-commercial activities, then I’d be angry.
Police consider this a matter of licensing unless a driver is breaking the Highway Traffic Act. Const. Clint Stibbe raises an interesting thought, however, as we wind up the call.
“Right now, police cars, rentals and taxis that are decommissioned have to be registered with the Ministry so as to be readily and honestly identified to buyers. Where’s the protection for buyers buying a car that hasn’t been flagged but has been used commercially?”
Uber may end up being too big to fail as riders vote with their wallets and their phones. But until licensing commissions and politicians sort out the fine print, your biggest concern if you plan on driving for Uber in Canada isn’t whether you can use the HOV lanes — it’s whether your insurance will kick you to the curb.