Insurance Risks for Uber-X Drivers

May 6th, 2015 by Lianne Sharvit

In a recent interview with Global, I spoke about the risks Uber-X drivers face when they are not properly insured while operating an Uber vehicle.

Many Uber-X drivers only carry personal car insurance, as opposed to commercial insurance, when operating their Uber-X vehicles. However, these drivers may not be aware of the potential consequences they could face if they are involved in a collision.

In particular, the standard automobile policy of insurance provided for under the Insurance Act, R.S.O. 1990, c. I.8 specifically excludes coverage for vehicles carrying paying passengers. This means that an insurance company will deny coverage to an Uber-X driver if it is determined that the individual was carrying Uber-X passengers at the time of the accident.

Where coverage is denied, an insurance company will take what is referred to as an off coverage position, and will therefore only be liable for up to $200,000 of the Plaintiff’s damages. However, the insurance company will then have the right to subrogate against the Uber-X driver, which means that the insurance company can go after that driver for any amounts paid by the insurance company to the Plaintiff, and that driver will be personally on the hook. In addition, that driver may be personally on the hook for any amounts awarded to the Plaintiff exceeding $200,000.

There are other risks to Uber-X drivers as well. In particular, I was interviewed by Global with respect to their news story regarding a number of Uber-X drivers who were charged with operating a taxi service without a commercial license or insurance. These charges will appear on their driver record, which could impact their insurance coverage. In particular, on this basis, their insurance company may not wish to renew their policy, and other insurance companies may be unwilling to provide them with a policy. The last resort will be to obtain insurance from The Facility Association, which provides insurance to individuals who are unable to obtain it elsewhere. However, drivers who are forced to obtain insurance from The Facility Association can expect to pay high premiums.

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