Auto Insurance

What you need to know about car insurance when driving for Uber

By: Martin Dasko on March 28, 2016

“What happens if you get into an accident?”

Someone asked this at the Uber information session that I attended last year when I went to sign up for Uber in person. That was a very interesting question because car insurance is always a tricky situation in general, and lately ride-share insurance has become a point of focus across Canada.

Uber is new and exciting. As a passenger, you press a few buttons on your phone and you have a ride coming to pick you up in minutes. You get to save money and you have the convenience of a cash-less system. As a driver, you get to make a few extra bucks with a part-time job that you can turn on/turn off at any time. Everyone is talking about Uber.

The one grey area with driving for Uber is the insurance situation. I was lucky enough to never get into an accident while driving for Uber, but the thought definitely crossed my mind a few times. I constantly worried about what I would say if I crashed my car with passengers in the back.

So: what do you need to know about car insurance for Uber?

Your insurance company doesn’t want you driving people around for pay

I hope that this is clear. You were insured under the assumption that you would be driving for personal reasons, not commercial reasons. If you want commercial insurance like a cab driver, you’re going to have pay more money. This isn’t just a few dollars either. This is actually why cab drivers are protesting Uber. They feel that Uber doesn’t have the proper insurance in place. Cab drivers also are frustrated because they have a different type of insurance.

Back to the original point. According to the Financial Post:

“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.”

That statement alone left me feeling pretty nervous when I originally read the article last summer when I started driving for Uber. A serious car accident is something that could lead to colossal financial and legal issues.

Some companies now offer ride-share insurance in Canada, so if you are driving for Uber certain companies will cover passengers as well as you. But you’re still likely going to pay a higher premium then if you just stop with personal coverage.

Uber claims that they insure every ride

According to the Uber website:

“From pickup to dropoff, every trip around the world is insured—protecting riders, drivers, and everyone else on the road.”

With that being said, Uber still requires you to carry personal auto insurance or else they won’t accept you as a driver.

As you can see, this is where the grey area exists. Uber promises to insure you if you get into an accident. On the other hand, your insurance company doesn’t want you driving for commercial reasons. You can either find an insurance company that knows you drive for Uber or you can choose to not inform your insurance company about your part-time job as an Uber driver.

This is where you have to really conduct your own research because there’s a ton at risk. If you tell your insurance company, you risk losing your coverage, or you risk your insurance company forcing you to buy more expensive policy. However, if you don’t tell your insurance company and they find out after your accident you still might not be covered, and then you have even bigger problems.

Uber is an exciting new piece of technology that’s disrupting the whole personal transportation industry. I’m eager to see what happens next when it comes to the insurance situation. I hope that everything gets straightened out so that Uber drivers and passengers don’t have to worry about insurance, and everyone can receive the coverage they need at an affordable price.