Insurance Companies in Ontario, Canada
Starting in February, Aviva Canada plans to let its own car-insurance customers add extra coverage if they want to work part-time for a service like Uber, whose app lets riders summon freelance drivers online.
“This can be had for as low as $600 a year, ” said spokesman Glenn Cooper. “Yes, it goes up from there. It goes up depending on your driving record, where you live, and all those factors that go into your regular policy.”
The idea, for Aviva, is to make it dead simple for its existing customers to tack more coverage onto policies they already have, he said, like insuring a family heirloom in a home insurance policy. You just call and ask.
The gap between the price of taxi coverage and the regular personal auto insurance most Uber drivers carry is a major competitive advantage for ride-sharing drivers. Insurance for taxi drivers typically runs about $5, 000 a year, Cooper said, while personal insurance is a fraction of that. It’s one of the reasons an Uber ride is usually a lot cheaper than a taxi ride: Uber drivers don’t have to make as much money on each ride to turn a profit.
Uber has said it has coverage of up to $5 million for drivers using its banner, but Canadian authorities haven’t been satisfied with that. There hasn’t yet been a major crash involving an Uber driver in which an insurance company has refused to cover either the driver or a passenger because the car wasn’t properly insured, but the Insurance Bureau of Canada, which represents insurance companies, say that’s a real danger. The province of Alberta looked at the issue and concluded that ride-sharing drivers who don’t have commercial-level insurance aren’t meeting legal requirements, either.
“This is happening every day, all day, and the appropriate coverage isn’t in place, both for the driver and for the passenger, ” Cooper said. “There’s been a lot of ambiguity.”
The Aviva policy will have limits, he emphasized. The big one is that it’ll only cover people who drive for Uber part-time, up to 20 hours a week. “Once you get over 20, this is really getting into a full-time gig, and from what we’ve heard from Uber and others, this is mainly for people making some extra money with a part-time job, ” Cooper said.
Although the company announced its plans Wednesday, it’ll take a few more weeks to get approval from Ontario’s regulator, the Financial Services Commission of Ontario, Cooper said. “The details aren’t finalized yet. We’re working with FSCO. The regulator wants this to happen. There’s a gap in the market.”
(A spokeswoman for Finance Minister Charles Sousa said the company has not actually filed anything yet, but when it does the commission “will review Aviva’s new product in a timely fashion to ensure that drivers and passengers are protected.”)
Toronto, with an estimated 16, 000 ride-sharing drivers, is a big attractive target, Cooper said, but they’ll offer the coverage provincewide. After Ontario, Aviva plans to offer the coverage in other provinces, but each has its own insurance authority to work with, so that could take some time.
Back in September, hoping to address the insurance problem, Uber announced it was working with Intact Financial Corp. on something similar, which was supposed to be the first ride-sharing insurance in Canada. They haven’t said anything about it since; at the time, working through the details with the financial services commission was supposed to be the remaining hurdle.
Uber spokeswoman Susie Heath said her company hasn’t seen any details of Aviva’s policy but is “encouraged to see a growing number of Canada’s insurers show interest in innovation in the transportation space.” They’ll work with anyone who wants to offer something similar, she said.
None of this, of course, touches Uber drivers’ other really big problem, which is that most cities see them as violating municipal rules forbidding people to run unlicensed taxi services. The insurance issue is one thing, but regular tickets from bylaw officers who treat Uber drivers as bandit cabbies are even more expensive. Many cities, including Toronto and Ottawa, are wrestling with how to deal with an upstart industry that just doesn’t care about how the driving business has been regulated until now.