What Intact’s Uber specific insurance will mean

Intact Insurance is leading the way in bringing clear auto insurance options for Uber drivers, pointing to an easing of tensions between Ontarian authorities and the drive sharing company. One of Canada’s leading insurance companies, Intact has been in discussions with Uber with a view to creating a specialist insurance policy.

Intact Uber Car Insurance Ontario
Intact Uber Car Insurance Ontario

That was announced a week ago, although both companies are still coy on exact details or even when we will see this insurance policy come to fruition. However, it could finally bring to rest the growing controversy surrounding Uber, which has come under fire increasingly through 2015. So what does Intact’s potential policy promise?

Uber is controversial because governing bodies are struggling to find meaningful ways of regulating the service, with the city of Toronto even trying to get the company shut down. Ontarian city Waterloo proposed more measured regulations, but admitted it was hard to compile any serious stipulations because of the nature of Uber, which is almost a pseudo taxi service.

The company has courted more controversy thanks to its insurance model, which has a terms of service that says drivers cannot use personal insurance policies. However, Uber still accepts drivers using their own personal auto coverage despite saying they cannot do so. It is a grey area that has left drivers uncovered as they breach Uber’s rule and are not provided for by their own policies, as they should be operating with commercial car insurance.

Intact Insurance is now setting up to bridge that gap by offering a clear Uber specific policy that drivers of the service can use to stay covered both by their own provider and under Uber’s own coverage. Intact has not discussed the finer details of the coverage, although it is likely to be directly marketed to Uber drivers and could even mix in a personal policy to cover those who use their daily drivers with the service.

“With the growing popularity of the sharing and on-demand economy, we are adapting our product range to offer innovative solutions to meet the changing needs of consumers,” Louis Gagnon, president of service and distribution at Intact Financial Corp., said in a statement.

“Uber is excited to be working with Intact Financial, the leading Canadian provider of auto insurance, to develop an innovative insurance plan specifically tailored for ridesharing in Canada,” Ian Black, the general manager of Uber Canada, said in a statement.

Intact teaming with Uber for tailored auto insurance

There has been potential progress in the attempts to regulate drive sharing company Uber and clear up murky insurance rules surrounding the service today.

intact Uber Car Insurance Ontario
Intact Uber Car Insurance Ontario

Toronto based Intact Financial Corp. is working with Uber to create a specifically tailored auto insurance package for drivers using the sharing model. In recent months Uber has come under fire for unclear insurance rules that leave its drivers uncovered in the event of an accident, with many of them using personal auto insurance instead of commercial insurance while driving for the company.

Intact, one of the leading insurance companies in Ontario and across Canada says that it is currently working with Uber, government, and insurance regulatory bodies across the country to come up with a policy that does not defy regulations.

Any new insurance coverage that can be taken out via Intact by Uber drivers would need to pass Canadian and provincial laws otherwise it would be a case of back to square one in terms of solving the Uber problem. Intact is coy on initial details and said it is too early to discuss the finer points of the plan that will also be sold under its Belairdirect brand.

“With the growing popularity of the sharing and on-demand economy, we are adapting our product range to offer innovative solutions to meet the changing needs of consumers,” Louis Gagnon, president of service and distribution at Intact Financial Corp., said in a statement.

Uber allows customers to hail a car via a smartphone and has blurred the lines of what we think is a usual taxi service. This has led to widespread calls in Canada and worldwide for the company to be regulated more strictly, and in some cases shut down. The city of Toronto tried to shut the service down but failed, while other proposals have called for regulations that police Uber drivers.

Insurance has been a talking point around the company because Uber accepts driver one personal insurance claims even though the terms of service agreement states they must have commercial coverage.

“Uber is excited to be working with Intact Financial, the leading Canadian provider of auto insurance, to develop an innovative insurance plan specifically tailored for ridesharing in Canada,” Ian Black, the general manager of Uber Canada, said in a statement.

Despite Intact currently working on a new Uber specific policy there is currently a gray area behind what insurance coverage drivers need. The Insurance Bureau of Canada says that anybody working for Uber drive sharing or thinking about doing so should contact their car insurance provider and see if they are covered to drive commercially.

Many Canadians driving for Uber breach company’s service agreement

This week an Ontario based UberX driver revealed he would sue the company because it did not cover him after he was involved in an accident while carrying an Uber passenger. Tawfiq Alam found that his personal policy did not cover him and wants to warn other Uber drivers of the insurance dangers from working with the company.

However, what is the insurance secret of Uber, and why is the system so confusing?

Many Canadians driving for Uber breach company’s service agreement
Many Canadians driving for Uber breach company’s service agreement

It is important for all potential and current Uber drivers in Canada to know that their personal auto insurance does not cover them to drive for the company under any circumstance. It is also important to know that Uber’s insurance model in Canada is always based on a contingent system, which means the company will only get involved if your personal insurance company declines a claim.

Which it definitely will. Under Canadian insurance laws in all provinces a company will not cover a personal insurance policy holder if they operate livery, rideshare, or peer 2 peer transportation activities. Indeed, not only will your insurance company decline cover, it will also almost certainly cancel the policy outright.

Of course, the next logical route would be to simply take out a commercial auto insurance policy which would allow you to use your vehicle as a working car. Uber certainly hints that is the best course of action in its “Transportation Provider Service Agreement.”

  1. Inform your insurer of the P2P transportation service you provide; and B) ensure that your insurance policy provides coverage for the P2P transportation service you provide.

Uber is doing the right thing by saying drivers should confirm their involvement with the company through their insurance provider. The problem arises when one realises that Uber does in fact still accept personal policies from its drivers in the sign up process, knowing that insurance companies in Canada will not issue policies for P2P transportation.

This means the company accepts people using their personal auto insurance without having declared it, something Uber says its drivers should do in the agreement. In other words, Uber is accepting drivers who it can easily detect are breaching the insurance rules in the agreement. This effectively is laying those drivers out to dry, as they will not get covered by their personal policy and will then not be helped by Uber because they broke the terms of the agreement.

The “Transportation Provider Service Agreement” sums this up as such:

  • Failure to secure or maintain satisfactory insurance coverage shall be deemed a material breach of this Agreement and shall result in the immediate suspension of the Agreement and the loss of your right to receive Requests under this Agreement.

We have reached out to Uber to see if the company can offer clarification on this matter, or if it even knows it is accepting Canadian drivers who are instantly in breach of the service agreement.

Uber is dominating the public relations war

It’s been a roller-coaster month in Toronto for the popular ridesharing company Uber: while traditional Toronto taxi companies turned Bay Street into a parking lot to protest the Silicon Valley company’s presence, Uber announced it would be delivering lunch—and puppies.

 It’s been a roller-coaster month in Toronto for the popular ridesharing company Uber: while traditional Toronto taxi companies turned Bay Street into a parking lot to protest the Silicon Valley company’s presence, Uber announced it would be delivering lunch—and puppies. The way to almost anyone’s heart. The city is currently embroiled in a legal battle against Uber, as they’ve filed for a court injunction to stop Uber’s operations in the city. Taxi companies argue that Uber is operating as an illegal taxi service because their drivers don’t have the same licenses required to operate a taxi in the city, and it’s likely that many Uber drivers don’t have the proper insurance either. While it’s uncertain who will come out of the courtroom unscathed, Uber is the undisputed champion in the ring of public perception, as the cab companies chose to deliver gridlock rather than food and furry friends. Various Toronto cab drivers put aside their differences on the afternoon of May 14 to swarm Bay Street between Queen St. and Dundas St., blaring their horns in protest of Uber operating an alleged “illegal” taxi service in the city. Meanwhile, Uber offered customers the chance to play with puppies for 15 minutes on April 30. For a $30 fee, customers could use the app to request puppies be delivered to an office in Toronto, Ottawa, Montreal, or Edmonton. Uber donated all proceeds to dog rescue shelters in the various provinces. More recently, on May 14, Uber announced the launch of its “UberEats” service, which allows users of the app to request meals from certain restaurants between 11 a.m. and 2 p.m. on weekdays. It’s a smart move by Uber to fill a gap in the demand for the service during midday hours. More importantly though, both of these services seem like part of an even smarter public relations strategy: during a time when the media has been focusing like a laser beam on Uber’s battle with the city, Uber is filling their headlines with cute animals and convenient lunch services while the cab companies do their best to disrupt Torontonians. Uber has even promised to deliver ice cream to Toronto Uber users on a hot summer day sometime in the future. While we can only wait and see what the court decides at the beginning of June, one thing is clear: Uber is winning the public relations war, and the cab companies are losing. Ask anyone what they think of Toronto cabs, and you’ll likely get some responses like “long wait times” or “rude drivers.” Uber is dominating the public relations war
Uber is dominating the public relations war

The way to almost anyone’s heart.

The city is currently embroiled in a legal battle against Uber, as they’ve filed for a court injunction to stop Uber’s operations in the city. Taxi companies argue that Uber is operating as an illegal taxi service because their drivers don’t have the same licenses required to operate a taxi in the city, and it’s likely that many Uber drivers don’t have the proper insurance either.

While it’s uncertain who will come out of the courtroom unscathed, Uber is the undisputed champion in the ring of public perception, as the cab companies chose to deliver gridlock rather than food and furry friends.

Various Toronto cab drivers put aside their differences on the afternoon of May 14 to swarm Bay Street between Queen St. and Dundas St., blaring their horns in protest of Uber operating an alleged “illegal” taxi service in the city.

Meanwhile, Uber offered customers the chance to play with puppies for 15 minutes on April 30. For a $30 fee, customers could use the app to request puppies be delivered to an office in Toronto, Ottawa, Montreal, or Edmonton. Uber donated all proceeds to dog rescue shelters in the various provinces.

More recently, on May 14, Uber announced the launch of its “UberEats” service, which allows users of the app to request meals from certain restaurants between 11 a.m. and 2 p.m. on weekdays.

It’s a smart move by Uber to fill a gap in the demand for the service during midday hours.

More importantly though, both of these services seem like part of an even smarter public relations strategy: during a time when the media has been focusing like a laser beam on Uber’s battle with the city, Uber is filling their headlines with cute animals and convenient lunch services while the cab companies do their best to disrupt Torontonians.

Uber has even promised to deliver ice cream to Toronto Uber users on a hot summer day sometime in the future.

While we can only wait and see what the court decides at the beginning of June, one thing is clear: Uber is winning the public relations war, and the cab companies are losing.

Ask anyone what they think of Toronto cabs, and you’ll likely get some responses like “long wait times” or “rude drivers.”

Ask someone what they think about Uber? “Puppies and lunch” might show up in their answer.

GEICO offers special insurance product for Uber drivers

American insurance company Geico announced in February that it will now be offering a specialized insurance product that covers ride-sharing services like Uber and Lyft in Virginia.

“We have spent a lot of time understanding the needs of ridesharing drivers,” said Othello Powell, director of GEICO commercial lines, in a statement.

GEICO Auto Insurance
GEICO offers special insurance product for Uber drivers

“What we developed is a hassle-free product that covers both personal use and ridesharing use,” he said. “The insurance applies whether or not the app is on and whether or not you have a passenger. The coverage is also not limited to just one transportation network company.”

The move comes in the midst of a drawn-out battle between Canadian cities and ridesharing companies over the legality of the services, as normal taxi drivers need a license to operate.

In late November 2014, the city of Toronto filed an injunction against Uber, claiming it has been operating as an unlicensed taxi brokerage; however, Uber’s standard defense is that it’s merely a technology company, and it therefore shouldn’t have to conform to licensing or regulatory standards.

The problem is that traditional cabs pay about $10,000 a year for their permit and commercial insurance, whereas the Uber drivers pay nothing more than their personal insurance policy.

Despite Uber ensuring drivers and passengers that they’re covered under a $5 million liability policy, the Insurance Bureau of Canada (IBC) says it might not be enough.

Pete Karageorgos, director of consumer and industry relations for the IBC, told the Toronto Star that if an Uber driver has an accident without a commercial insurance policy, “then there’s likely going to be some challenges.”

However, the problem is the demand for taxis in Canadian cities far outweighs the supply: Toronto has a rate of about 18 cabs per 10,000 people, compared to rates like 116 per 10,000 for Washington, D.C. and 63 in New York City.

Despite the backlash from Canadian cities, Uber is bridging this gap; and now, insurance companies are adapting as well. It’s likely we’ll see similar moves from Canadian companies in the coming years.

Uber Cuts Prices in Canada

Uber may have enjoyed meteoric growth in Canada over the last 12 months, but even the all-conquering ride-sharing UberX service has slow times. January is quiet for all peer 2 peer driving services such as taxis and Uber is not immune as consumers stay in more often as winter weather grips Canada. Uber has responded by slashing prices, a sort of winter sale, in Canada and the United States.

The company realizes this slower time of year and says it will cut prices across 100 cities in the United States and Canada, mirroring a tactic the company used in both 2014 and 2015.

“Five and a half years in, we’ve learned that the single most effective way to boost demand during the winter slump is to cut prices for riders,” Uber said in a new press release. The company says it wants consumers to “head out of the house, ditch their keys, and avoid parking.”

Carsharing Driver Car Insurance Toronto
Carsharing Driver Car Insurance Toronto

Just how much customers will save depends on their region, with some cities getting a 10 per cent cut and others getting as much as 20 per cent in savings. The nature of Uber’s service should mean that customers paying less results in drivers earning less, but Uber assures that this will not be the case, adding:

“We are guaranteeing earnings for drivers to ensure that no one is disadvantaged. That’s 24/7 incentives to put drivers at ease,” the company says in the release.

Uber has recently been in a sticky situation with its customers regarding prices of late as the company spiked its prices considerably during the New Year’s Eve period. That disgruntled plenty, and perhaps this new price cut is a move by the company to make amends with those consumers. Uber has not said how long the new prices will last, but customers should expect a return to normal rates at the end of January.

UberX has become hugely popular in Canada among workers and customers. Nearly 20,000 people drive for the company in Toronto alone, but no city in the country currently regulates the service, meaning drivers are effectively operating illegally. Doors are opening however as Toronto has voted to regulate the UberX service, starting this year, while Aviva Canada announced last week that it is developing an auto insurance policy that focuses on ride sharing services.