July 30, 2015 by Sara Tatelman
Uber’s $5 million insurance policy won’t help its Ontario drivers, says the president and CEO of Baird MacGregor Insurance. Philomena Comerford told a news conference at Toronto City Hall today that the ride-hailing company’s coverage is non-owned automobile liability, which only kicks in if Uber is proven to have been negligent.
Ontario drivers are legally required to buy insurance for any vehicle registered in their names. But Comerford argues Uber’s policy can’t replace their personal coverage, which they’re violating every time they take a paying passenger.
“In the insurance industry,” said Comerford, “they would throw the book at me, if I attempted to pass off non-owned automobile liability policy as being primary auto insurance. It is not.”
When drivers fill out the Ontario Application for Automobile Insurance, they must declare if their car will be “used to carry passengers for compensation or hire.” If the answer’s yes, they must buy commercial insurance. While insurers in a few U.S. states have developed hybrid policies allowing drivers to switch between personal and commercial coverage depending on who is in the car, no such option exists in Canada. And since an UberX driver is unlikely to have access to fleet insurance prices, Comerford estimates they’d likely be stuck paying about $23,000 a year for high-risk coverage from Facility Association.
But that’s nothing compared to potential fines for not telling the truth on the insurance application, or not telling your insurer after you start to drive for UberX. “Some of the financial consequences of making false or misleading statements with respect to insurance in Ontario are fines and convictions,” says IBC’s director of consumer and industry relations, Pete Karageorgos. The maximum fines are $250,000 for the first offence and $500,000 for subsequent offences. And of course, policies can be voided.
At the news conference, Comerford was challenged by reporters on the fact that she represented many of the taxi companies in Ontario. “Yes, we’re one of the specialists in the province of Ontario, for sure,” shot back Comerford. “And that’s why I’m here. Because I understand the exposure.”
CI Top Broker reached out to Uber for comment but did not receive a response by our deadline.
This story was originally published by Canadian Insurance Top Broker.