Over the last few years, ridesharing services like Uber have become increasingly popular throughout Canada. Never used one of these services before? Here’s how it works:
While drivers and passengers cite ridesharing as a cheaper, more convenient alternative to traditional taxi services, the industry has posed a number of challenges for regulatory bodies. One of the major issues relates to insurance coverage, as standard insurance and rideshare company-provided polices are often insufficient and do not protect drivers from a number of common liability risks.
To combat this insurance gap, both Alberta and Ontario recently worked to create solutions that would better protect rideshare drivers and passengers.
As of July 7, 2016, the Ontario government approved a regulatory change to the Insurance Act that allows insurers to offer commercial fleet insurance to rideshare companies. Previously, commercial activity—such as using a vehicle to chauffer passengers in exchange for payment—was excluded from standard insurance policies. This left most drivers inadequately protected and liable for any and all costs associated with an accident.
Uber has already adopted the new coverage, which is being offered through Intact Insurance. Uber drivers in Ontario will be protected automatically and do not need to be Intact Insurance clients in order to be eligible.
Intact’s policy was approved by the Superintendent of the Financial Services Commission of Ontario (FSCO) and includes the following coverage:
- Approximately $2 million in third-party liability coverage per incident
- Statutory Ontario accident benefits
- Approximately $2 million in uninsured automobile coverage
- Property damage coverage
- Contingent collision coverage
- Protection in between transporting passengers
In general, Ontario hopes companies will create new insurance products that can help address concerns related to ridesharing. Moving forward, the FSCO encourages drivers to inform their insurers that they are transporting passengers for pay and to review the new Intact policy, as it may differ from the coverage provided by their personal auto policies.
It should be noted that, as it stands, this new FSCO-approved coverage only applies to Uber. Drivers for other ridesharing companies may still be unprotected as the government continues to craft a long-term solution.
To read Ontario’s official news release regarding the regulatory changes, click here.
On July 1, 2016, a new insurance policy was approved by Alberta’s Superintendent of Insurance. This new policy—Alberta Standard Automobile Form – Transportation Network S.P.F. No. 9 (SPF9)—provides automobile insurance for Transportation Network Companies (TNC) and their authorized drivers.
The policy, which is also being sold to Uber through Intact Insurance, aims to protect drivers from the moment they launch the rideshare app until they log out. Specifically, the new policy is meant to cover statutory accident benefits in the following three periods, as defined by the Alberta government:
- Period 1: This is when a TNC driver activates an app with no passengers. During this time, $1 million in contingent third-party liability coverage is offered.
- Periods 2 and 3: At this point, the TNC driver has picked up a passenger and accepted fare. During this time, $2 million in third-party liability coverage, with optional collision or comprehensive coverage, is offered.
These changes are part of Alberta’s ongoing efforts to create safer roadways. In addition to these efforts, revisions to the province’s Transportation and Safety Amendment Act came into force on July 1, 2016. The regulation includes a number of details related to TNCs, and does the following five things:
- Clarifies the obligations TNCs must abide by in order to operate in Alberta
- Requires TNC drivers to have a Class 1, 2 or 4 driver’s licence
- Establishes standards for police checks
- Defines insurance requirements
- Provides legal definitions of TNCs and TNC drivers
In essence, the Alberta government wants to put the onus of ensuring that TNC drivers have the proper insurance on the TNC companies themselves.
The Future of Rideshare Legislation
The rideshare industry is constantly evolving, and provincial regulators will continue to be reactive. It is likely that more and more governmental bodies will continue to pass legislation similar to that of Alberta and Ontario moving forward.
For more information on the ridesharing industry, including a breakdown of potential risks, contact Mumby Insurance Brokers today.