Posted on November 04, 2015
Ridesharing Programs and Insurance: What do you Know?

With each passing day, ridesharing programs, such as Uber, are growing in popularity. These services provide benefits to both drivers and passengers. For drivers, earning solid income is a real possibility. For passengers, Uber, among other services, offers lower rates than taxi drivers.

But here is something you may not be thinking about: the insurance implications.

There are risks associated with ridesharing programs, both for drivers and passengers. In fact, many believe the myth that drivers and/or passengers are automatically covered in the event of an accident.

The Insurance Brokers Association of Ontario (IBAO) touched on this in greater detail, with President Michael Brattman noting the following:

“The simple fact is that UberX is a new concept that Ontarians are embracing quickly, both as drivers and as passengers. At this time, drivers and passengers should know that there is no existing endorsement for a personal lines policy that is available today that would guarantee coverage or protection in the event of a collision during an UberX experience.”

Take for example a driver working for Uber with a standard personal auto insurance policy. This person has a responsibility to inform their broker or insurance company that they are also using their vehicle for commercial purposes. Failing to do so typically means that their coverage is not extended. 

Most people purchase car insurance because they have to. They never think they will be involved in an accident, until something bad happens to them. At that point, especially if one or more party is injured, things can become more complex. Add in an Uber driver and passenger, and the end result is a complex claim.

Ridesharing programs aren’t going anywhere. If anything, these services will continue to grow in the years to come. For this reason, it is imperative for drivers and passengers to be fully aware of their rights and responsibilities in regards to insurance. 

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