Ride-share services like Uber have introduced revolutionary innovations to the transportation industry, but in so doing, they’ve also created issues around insurance that have never been dealt with before.
With more and more people looking to supplement their incomes by offering their vehicles and driving services for ride-sharing programs, it’s very important to stay abreast of the latest developments. You don’t want to be caught without coverage, as penalties can be stiff. Worse, you could be on the hook for major liabilities in the event of an accident or injury.
The Risks of Ride-Sharing
Ride-sharing services are convenient, but they also present some risks for both drivers and passengers:
- Personal car insurance policies don’t cover the use of the vehicle for commercial purposes, so drivers without proper insurance are not covered in the event of an accident
- Drivers aren’t required to undergo any type of special training, and it is entirely up to them to maintain their vehicles; maintenance standards are not monitored by the companies that provide these services
- As many experienced on New Year’s Eve of 2016, passengers are not protected from Uber’s so-called “surge pricing”, which can see prices jump to 10x the normal fares. When drivers are at a premium, the cost of a ride rises, and some paid well over $1,000 for rides over an hour long
These risks recently led major Alberta municipalities to question the legality of Uber, and they agreed to suspend their services after an undercover sting led to charges against more than 50 drivers. This suspension is pending the resolution of insurance issues that were causing major worry for authorities.
How Coverage Is Changing to Accommodate Ride-Sharing Services
The issue with ride-sharing is that while regulators want drivers to carry the right type of auto insurance, many insurance companies simply didn’t offer it. Thus, it’s become incumbent upon the insurance industry to adapt to the new landscape and develop products that facilitate the safe use of ride-sharing services.
While Uber has long maintained that its drivers are covered under an umbrella policy held by the service’s parent company, local authorities aren’t satisfied. The Insurance Bureau of Canada (IBC) responded by urging insurance companies to develop products for drivers who offer services through ride-sharing platforms, and it appears as though major changes are afoot.
Right now, it’s expected that commercial auto insurance providers in Alberta will start offering policies that cover Uber’s services in early 2016.
Questions? Contact the Experts at Lane’s Insurance
If you’re thinking about driving for Uber to earn some extra money, we urge you to contact us at Lane’s Insurance to learn more about your coverage options. Lane’s Insurance works with Alberta’s leading car insurance providers, and you’ll be able to get the protection you need as soon as it becomes available on the market.
Lane’s Insurance is committed to customer education, offering an extensive range of digital resources that help you better understand insurance-related issues. In addition to highly competitive quotes, Lane’s provides comprehensive claims support and outstanding customer service. You can even bundle your home and auto insurance together to save as much as 20 percent!
Don’t take risks with your insurance — visit Lane’s Insurance online today to make sure your coverage is complete and offers the right kind of protection.