TORONTO • UberX drivers have a lot to worry about these days: angry taxi drivers, ticket-happy bylaw officers, even whether they’ll be allowed to continue operating in some cities. But perhaps the most pressing concern is one many aren’t even aware of: Their personal auto insurance is unlikely to cover them in the event of accident.
Car insurers use of a device that watches everything you do while driving, from what time of day you drive to how sharply you brake, sounds a lot like Big Brother to privacy advocates
Take the case of Tawfiqul Alam, an UberX driver in Toronto who was T-boned by a red-light runner while transporting a passenger on June 9. The accident sent both him and his passenger to hospital and totalled his minivan.
But the real shock came later, when Alam went to file a claim with his insurance company and was told that his personal policy was invalid because he was driving passengers for pay.
The worst part, according to Alam’s lawyer, was that Uber Technologies Inc. specifically told him not to worry about insurance when he first applied to work for the company.
“He asks them specifically about insurance and they say, ‘Don’t worry, we’re a $1-billion company and we have $5-million of insurance so you’re fine,’” said Isaac Zisckind, a personal injury lawyer at Diamond & Diamond.
“What they did is basically willfully push him into a misrepresentation contract for somebody who’s not educated. Uber should have known — they should have done their research.”
The issue is that personal auto insurance policies don’t cover drivers who are transporting passengers for commercial purposes. Taxi drivers are required to get a special kind of commercial insurance that is significantly more expensive than personal insurance, but the vast majority of UberX drivers — Zisckind estimates 95 per cent — don’t have any coverage beyond their personal insurance.
This means that when a driver is injured or his car is damaged in an accident that occurs while he’s carrying a passenger, his personal insurance policy will most likely be invalidated, leaving him without coverage.
“The worst thing you can do is not tell your insurance company (that you’re driving for Uber), because in that situation they have the right to say your policy is void in its entirety and there is no coverage for you,” said Daniel Mirkovic, CEO of Square One Insurance and former head of the British Columbia Automobile Association’s insurance operations.
Uber spokeswoman Susie Heath declined to discuss Alam’s case, but she did acknowledge that Uber only requires its drivers “to carry personal auto insurance.”
However, she stressed that every ride on the UberX platform is also backed by $5 million of contingent auto liability insurance covering bodily injury and property damage.
“In the event of an accident during an UberX trip, passengers, pedestrians, other drivers, and the community at large can rest assured knowing that ride-sharing partners are well covered by commercial auto insurance in addition to any insurance coverage maintained by the driver,” Heath said in an emailed statement.
It is not at all clear whether the $5 million of coverage that Uber often cites will cover its own drivers, however.
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