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How Does Car Insurance Work For Uber Drivers Work

By Derek Visser  •  My Insurance Broker
December 18, 2017  •  7 minute read

There’s no question that Uber and other rideshare services have changed the way people hail a cab. But they have also had a significant impact on how car-for-hire drivers work — and get car insurance coverage.

If you drive for Uber, you need rideshare insurance. We review the ins and outs of Canada rideshare insurance, tips for how to handle insurance after an accident, and how to save money on Uber insurance for drivers.

What is Ridesharing?

If you said “ridesharing” 10 years ago, most people would have likely looked at you like you were crazy. Today, the gig economy has exploded, and ridesharing is arguably just as popular as calling a traditional taxi. With the Uber app, people get matched with a driver that has been vetted and rated by Uber and by other users. Using the app’s GPS feature, riders can then track their ride as it approaches the pickup point. Riders also pay through the app, making the transaction easy for everyone.

Uber has become such a fixture in everyday life, it’s hard to believe it has only been around since 2009. Its most well-known competitor, Lyft, was founded in 2012. Because both Uber and Lyft are privately held companies, they aren’t required to disclose how many people drive for them, making it tough to know just how many rideshare drivers are out there. It’s also tough to pin down exactly how many drivers work for Uber in Canada, as the service’s expansion into Canadian markets has unfolded more slowly than it did in the U.S.

Drive legally with Rideshare Insurance. Get your Uber Insurance quote from My Insurance Broker.

However, rideshare experts like Harry Campbell, former Lyft and Uber driver and founder of The Rideshare Guy podcast, says Uber stated it had 327,000 U.S.-based drivers in 2015. Because Uber’s workforce has consistently doubled every couple of years, Campbell says a current estimate hovers just under 1 million drivers in the United States.

Unlike Uber, which has drivers all over the world, Lyft has operated solely within the U.S. — until now. In November 2017, Lyft announced it is expanding its operations to Canada, with Toronto as its first city.

Today, Uber operates a variety of services, including Uber X, Uber XL, Uber Select, Uber Hop, Uber Pool and Uber Eats. If you drive for any of these services, it’s important to understand your responsibilities and obligations when it comes to car insurance coverage.

Where to Get Uber Insurance for Drivers

Because Uber and Lyft work by allowing motorists to use their own personal vehicles to give rides for profit, it’s normal to wonder how rideshare car insurance works. Do you use your own personal car insurance policy? Does Uber cover you once you sign up to offer rides?

Here’s what you need to know: If you drive for Uber in Ontario or Alberta, you’re automatically covered by a basic commercial car insurance policy through Intact Financial Corp. This coverage is provided by Uber, which means Uber pays the premium. The Intact Insurance covers rideshare drivers from the moment they log into the app until the moment a rider exits their vehicle.

In Ontario, Uber’s Intact Insurance policy for drivers comes in four phases:

Phase 0When an Uber driver is driving his vehicle for personal use and isn’t logged into the app, he’s covered by his personal car insurance policy and no Intact Insurance applies.
Phase 1Uber drivers who are logged into the app and available to accept rides are covered by $1 million in third party liability coverage, Standard Ontario Accident Benefits, and Collision and Comprehensive benefits (with a $1,000 deductible).
Phase 2Uber drivers who have accepted a ride and are on their way to collect a passenger are covered by $2 million in third party liability coverage, Standard Ontario Accident Benefits, and Collision and Comprehensive Benefits (with a $1,000 deductible).
Phase 3Uber drivers who are transporting a passenger are covered by $2 million in third party liability coverage, Standard Ontario Accident Benefits, and Collision and Comprehensive Benefits (with a $1,000 deductible).

While Uber’s Intact Insurance coverage is only in place in Ontario and Alberta for now, the CBC has also reported that Uber and Intact are working to extend the same automatic coverage in Québec, with plans to expand to other provinces in the future.

What Happens When You Have to Use Your Uber Insurance?

Accidents are a fact of life. No matter how careful you are, there’s a good chance that you’ll be in an accident at least once in your life. The more you drive, the greater the chance is you’ll end up in a fender bender.

It stands to reason that if you’re driving professionally, there’s a significant chance that you’ll end up in an accident. If that happens, it’s important to know what to do, who to call, and how to follow up with the appropriate parties.

Uber and Intact Insurance: What It Covers

If you drive for Uber in Ontario or Alberta, you are automatically covered by Uber’s blanket fleet coverage through its commercial Intact Insurance policy, which went into effect for all Uber drivers in Ontario and Alberta on July 7, 2016.

Per Uber, the Intact policy includes:

  • $1 Million Coverage Between Trips - Uber drivers receive $1 million in coverage for accidents caused by a third party while they are available for rides through the app but have not yet accepted a trip.
  • $2 Million of Third Party Liability Coverage Per Incident - Uber drivers receive $2 million in coverage for liability to third parties for accidents that occur anytime between a driver’s acceptance of a ride through the trip’s conclusion (when the passenger exits the vehicle).
  • $2 Million of Uninsured Automobile Coverage - This covers all vehicle occupants, including the driver, for injuries caused by an uninsured motorist, underinsured motorist or hit-and-run driver.
  • Statutory Ontario Accident Benefits - Uber drivers in Ontario are entitled to receive all benefits as set forth in the Statutory Accident Benefits Schedule (SABS), regardless of who is at fault.
  • Direct Compensation (Property Damage Coverage) - Uber drivers receive coverage for damage to their vehicle in cases where the accident is wholly or partially caused by another person.
  • Collision and Comprehensive Coverage - This covers the loss of an Uber driver’s vehicle up to its actual cash value, after a $1,000 deductible. This coverage only applies if the driver also carries a personal car insurance policy that insures the vehicle for collision and comprehensive coverage when the vehicle is not being used for ridesharing.

If you’re driving for Uber in Ontario or Alberta, it’s crucial that you understand what is and isn’t covered by Intact. Likewise, it’s also a good idea to frequently check Uber’s website for updated information — while it’s unlikely that there will be changes to the above coverage without significant notification, you don’t want to be left in the dark when it comes to your Uber insurance.

Uber Insurance for Drivers: Aviva Insurance

Aviva Insurance also offers rideshare insurance as an add-on to an existing personal car insurance policy. According to Aviva, the coverage became available for Uber drivers in Ontario beginning in February 2016, but the company is working on making its ridesharing add-on available in other provinces.

To qualify for rideshare insurance, an Aviva policyholder must meet certain criteria:

  • The driver must have had a Canadian or American driver’s licence for at least six years.
  • The vehicle can only be used to transport rideshare passengers for a maximum of 20 hours per week.
  • The vehicle can only seat up to eight occupants, including the driver.
  • The driver can’t use the vehicle to make retail or wholesale deliveries.

Car Insurance Coverage When You’re Not Logged Into the Uber App

Although Uber’s Intact Insurance applies while an Uber driver is logged into the system and available for rides, Uber drivers are not insured under the Intact policy when they are offline and not logged into the app. If you’re an Uber driver and you’re involved in a car accident that occurs when you’re signed out of the app, you must rely on your own personal car insurance policy for coverage.

It’s also important to note that the basic Intact car insurance for Ontario and Alberta Uber drivers may not be enough for all drivers. If you need more coverage, you can purchase your own more comprehensive Uber car insurance.

Additionally, Uber’s Intact policy does not apply to drivers who participate solely in the Uber EATS service. If you only drive for Uber Eats, you must purchase personal car insurance, along with an endorsement or add-on that extends coverage for any accident that occurs while you’re driving for Uber Eats. If you drive for both Uber and Uber Eats, you’re covered by Intact Insurance while you’re logged into the Uber app and available to accept rides.

Why Do I Need Uber Insurance If I’m Already Covered as a Driver?

If you’re already covered by Uber, why would you need additional insurance? The answer is complicated. While Uber does cover its drivers, Canadian law technically requires all commercial drivers who are carrying passengers for profit to have their own insurance coverage.

While Intact’s coverage technically solves this problem, it’s very clear that this is a murky area that has yet to be totally ironed out. Additionally, in the event of a crash — especially when you are carrying passengers — you always want to make sure that you’re financially protected against potential damages. If you’re driving for Uber to make extra cash on the side, the last thing you want is to be caught in a lengthy and expensive legal battle.

Do I Still Need Regular Car Insurance if I Drive for Uber?

While we mentioned it above, it’s important to emphasize that Uber’s coverage through Intact only covers you while you are logged into the app. If you get into an accident outside of the period, you must have your own car insurance.

Uber’s insurance is not a stand-in for regular car insurance. If you purchase additional Uber insurance as a driver, it’s important to see exactly what your plan covers. Is it comprehensive? Will it mirror Uber’s coverage period, or does it extend to when you are off the app as well? Always read your plan carefully — and make sure you work with a licensed agent or broker so that you’re positive you’re covered at all times.

Get the Best Rates on Uber Insurance for Drivers in Canada

Uber has broken new ground in the transportation industry. As with any major change, a lot of questions and unknowns followed.

One area that has cropped up again and again is insurance coverage — and it’s an issue that has created confusion in nearly every market in which Uber operates. When Uber first arrived on the scene in the U.S., many auto insurance companies denied coverage upon learning that a driver was involved in an accident while working for Uber. The same problem arose when Uber first expanded operations to Canada.

Fortunately, Uber’s commercial policy through Intact Insurance now covers Uber drivers while they’re on the clock for Uber. However, it’s still important for Uber drivers to maintain a personal car insurance policy, and to make sure they have enough insurance to cover them whether they’re driving on personal or Uber-related business.

If you’re a rideshare driver for Uber or Lyft, your commercial coverage might not be enough. Make sure you’re fully covered by contacting My Insurance Broker. We’ll help you find the best rates on rideshare insurance in Ontario and Alberta.