Will Uber blanket coverage edge out brokers?

Will Uber blanket coverage edge out brokers?

Will Uber blanket coverage edge out brokers? The new blanket coverage for Uber drivers in Alberta and Ontario will greatly improve the number of insured ride share drivers – but poses questions for brokers peddling existing endorsements.

Intact Financial Corp. announced the new coverage, purchased directly by Uber to cover its fleet, will be available in Ontario once ride share operations are officially legalized on July 15.

“This is really early days, and we’re completely still evaluating that,” says Adam Mitchell, president of Mitchell & Whale Insurance Brokers Ltd. “The endorsements that were bought (the Aviva endorsements)… one of the theories, is you don’t actually need it.

“And as a broker, we’re now questioning what’s the best thing we can do for the client? Should we be calling them and remarketing them to another company just for the endorsement? We’re left to try to understand the nuances of the coverage before we can actually give the advice.”

Aviva was the first to provide coverage for ride share drivers working up to 20 hours in Ontario and recently expanded their product offering to Alberta, where the province recently announced new policy reform for legal ride-share operations. Pembridge Insurance Company has also recently launched a ride-share endorsement in the Alberta market.

While automatically insuring drivers is a positive step in insuring the ride share industry is covered, Mitchell says he’s concerned that blanket coverage could reduce choice in the market, as well as limit accident benefit options, as Intact’s product offers only a $65,000 medical rehab without the option to buy up.

“What isn’t answered is if you take this (the endorsement) off, you’ve lost any of the carry forward,” he says. “Inside Aviva, whatever base-level policy limits you have, and increased accident benefits to new policies that happened, that carries forward on the endorsement. With Intact, it doesn’t, it pays out at the base level.

A fact sheet provided by Intact states: “This policy does not provide any optional coverages, regardless of what is included on the customer’s personal auto policy, other than Comprehensive and Collision (physical damage) coverage. Comprehensive and Collision coverage, with a $1,000 deductible, is only made available to drivers who have this coverage on their personal auto policy. This policy also provides Third Party Liability coverage and Standard Accident Benefits coverage.”
“If they don’t know what they have, they don’t have any option inside their Uber app to increase that limit. Every passenger that gets in is subject to that one single limit.”

He adds that given Uber’s lack of clarity on insurance in the past, it’s possible that drivers may not realize how limited their benefits are.

“Three days ago, Uber said, ‘There’s no problem. Every ride is insured.’ Today – ‘Oh, now they’re really insured, and they’re insured with Intact by this policy.’ But they will not go into the nuanced public discussion because it doesn’t serve them that you only have $65,000,” he says.

Related stories:
Uber drivers in Ontario are now insured automatically
Ride share coverage booms as Uber given green light by province