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Insurance industry officials warn that Uber drivers don't [always] have the proper accident coverage and are putting themselves and the public at risk when they get behind the wheel. That stark message, and a call for the city to regulate Uber drivers, came during what a pair of insurance officials and Councillor Jim Karygiannis called a "technical briefing" at Toronto City Hall Thursday.
They said many drivers for the controversial ride-sharing service are hiding their activity from insurers. By law, drivers must declare to their insurance company if they're driving passengers for hire so the insurer can provide the proper policy and accident coverage.
[...]
But Philomena Comerford, CEO of Baird MacGregor Insurance Brokers, said in many cases this isn't happening with Uber drivers. That means Ontario's motorists could be hit with higher premiums because of "significant and unexpected" injury claims.
"This problem comes at time when the insurance industry is working hard with the Ontario government to reduce personal consumer automobile insurance rates which do not contemplate this commercial activity," she said.
MacGregor said Uber's $5-million supplementary policy covers the company, but not the drivers themselves.
(Score: 4, Informative) by vux984 on Friday July 31 2015, @11:49PM
So because insurance isn't covering these drivers (aka they won't be paying out on claims), premiums will go *up*?
Yes.
What am I missing here?
The fact that insurance companies still pay.
The way car insurance works in principle is that you hit me, I make a claim against my insurance; and then my insurance company sues your insurance company. (In practice things are streamlined, actual lawsuits aren't necessary, and in many cases the insurance company is the same for both involved parties... but in principle that's still how it works.)
Now if you aren't properly insured, then what happens? The first half is the same. But then your insurance company decides you weren't properly insured it claim. My insurance company doesn't get any money from them. And I am screwed right... well turns out no.
Fortunately for me, I, like all motorists, have underinsured motorist protection. So that now kicks in. And the insurance company pays out damages against that, and is now out of pocket.
In principle the insurance company can recover the cost of the uninsured motorist claim (and thereby keep premiums down) by directly suing the uninsured motorist for the amount.
However the cost of the lawsuit is non-trivial, and all it usually accomplishes is to bankrupt the improperly insured motorist; so the insurance company only gets pennies on the dollar. It'll still do it because pennies on the dollar is better than nothing, but the difference still has to come from somewhere, and that somewhere is increased premiums for everyone to pay for the extra claims against the uninsured motorist protection coverage.
(Score: 2) by aclarke on Monday August 03 2015, @11:21AM
This may be how insurance works where you live, but it's not how insurance works in Ontario. All automobile insurance in Ontario no-fault. This means if you're in an accident, your insurance pays to fix your vehicle, and the other party's insurance pays for their vehicle.
With no-fault insurance, if I'm hit by an uninsured driver, I'm still covered, because my insurance is going to pay for my vehicle regardless.