Using your car as a taxi? Don’t lie about your insurance
More business travellers are switching to Uber and using taxis and limos less and less.
When it comes to working with hire-a-drive services like Uber, you can’t afford to overlook the insurance implications
“Uber drivers can use the HOV lanes,” read the headline. Upon closer observation, the sentence continued: providing they have three or more occupants, just like everyone else. So close, Uber, so close. The fancy 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?
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The Pan Am Games are set to descend upon the Toronto region in the coming days, promising to swirl the already catatonic gridlock further down into the innards of hell. I’m sure more than a few Uber drivers were parsing the fine print that permits taxis and airport limos to use the coveted HOV lanes, now temporarily drawn on an extra one hundred eighty five kilometres of major highways around the Greater Toronto Area. That’s in addition to the existing fifty permanent kilometres. In the eyes of the law, Uber still suspends in a no man’s land.
This article commenced out six months ago as a stunt lump: I was going to simply become an Uber driver for a day and report back. A call to my insurance broker simply seeking background information ground that idea to a halt, and swift. Even hinting what I was considering 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 rail 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.
News organizations aren’t fans of pseudonyms, but it didn’t matter. I couldn’t even get someone to play along with a black bar across their eyes and a voice scrambler. Uber advertises itself as an excellent way to make effortless money if you own a car. You must be twenty one with a utter licence, own a four-door car less than ten years old, pass a background check they pay for, and have valid car insurance.
Therein lies the knead for prospective Uber drivers here in Canada. “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, and if you check “no” and then sign off on the application and then begin accepting fees for ferrying people (or pizzas) around, you could be committing fraud.
It’s not that you can’t be an Uber driver and also have insurance; it’s that you can’t lie about it. A latest Forbes survey published in the U.S. found “…while the vast majority of respondents – almost 70% – say they plan to purchase a policy in the future, a disturbing 84% say they do not tell their insurer or their agent/broker about their ridesharing activities.”
Uber outlines how their end of the deal functions: your responsibility is railing on your individual insurance, and if damages reach past your boundaries, 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. And notifying your insurance company of your Uber intentions can work out one of two ways:
• You call your company and ask innocently if considering being an Uber driver could affect individual insurance. They could cancel your insurance or at the very least commence investigating it because now they know what you’re doing or;
• They can suggest to sell you the decent product for what you’re considering, which is commercial coverage. This will be – and I’m ballparking here – maybe three times your current rate.
So, there’s a chance some individuals won’t call their insurance company, and if that Forbes survey is even close to accurate, the chance is most won’t. Who can recall ticking that box so many years ago? Besides, if I embark delivering pizzas, I’m hardly going to have to call my insurance company, right? Actually, you are. Your insurer does need to know that you’re delivering pizzas. They want to know if anyone in your household with access to your car is delivering pizzas. Or flowers. Or Uber clients.
It’s not that they’re going to jack your rates similarly for pizzas and passengers. As Pete Karageorgos of the Insurance Bureau of Canada is quick to point out, “Insurers know pizzas aren’t passengers. Our job is to match policy to risk; it’s critical that you inform your provider of any material switch to that risk, and be see-through about it.”
If you’re not, you’re swimming in a fraud pond. In the event of a crash, insurers can opt to deny the claim, leaving you at the grace of someone like Uber’s Internet promises. They could also determine to cover the claim, but then back charge you the premium you should have been paying had you notified them in the very first place. I like to complain about usurious insurance rates, especially here in Ontario, but I would be angrier if payouts to drivers using their vehicles commercially are pooled with my non-commercial activities.
A call to police services exposes that cops consider this a matter of licensing unless a driver is cracking the Highway Traffic Act. Constable Clint Stibbe raises an interesting thought, however, as we wind up the call.
“Right now, police cars, rentals cars 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 indeed 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 largest 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.