Industry council warns of insurance coverage threat

Industry council warns of insurance coverage threat | Insurance Business

Industry council warns of insurance coverage threat
The Australia Taxi Industry Association (ATIA) has warned drivers and passengers that using ride-sharing service Uber could present major insurance gaps.

Using UberX, which allows car-owners to pick up passengers and transport them for a fee in their own vehicles, could lead to gaps in insurance policies as the practice has been declared illegal in each Australian state and territory.

Uber is flourishing worldwide and offers drivers and passengers a $5 million insurance policy but Blair Davies, CEO of ATIA, warned that the policy may not be as simple as it seems and had many questions for the company.

“UberX drivers should be demanding a detailed explanation on the insurance arrangements from Uber.
 
“What exactly are they covered for? What are the limits? What happens if they are at fault? Why is the liability coverage significantly less than that offered to motorists by Australian insurers?  Are UberX drivers and passengers protected by Australian consumer laws? Why does Uber continue to encourage drivers to accept so much risk and uncertainty, and also break the law?" Davies said.
 
“Drivers who buy Australian policies know exactly what they’re covered for because the terms and conditions of the policy are in the Product Disclosure Statement. Where is Uber’s PDS for UberX drivers? What is Uber hiding?
 
"Cutting through the hype and hysteria, it simply remains important to remember that not only are there question marks over whether ride-hailing services are insured, they are also illegal," continued Davies.
 
"So UberX drivers in particular need to be asking themselves the question, why take the risk?"
 
Davies charged that the Uber business model is exploiting “guilibility and the naivety of drivers,”  and warned that Uber drivers will be the ones that suffer from a lack of insurance and not the company.
 
ICA CEO Rob Whelan backed Davies and warned both drivers and passengers that the UberX service is illegal and could lead to substantial financial loss.
 
“Any motorist considering providing a ride-hailing service should first discuss this with their insurer to check the impact this might have on their motor vehicle insurance policies, in particular third party property or comprehensive car insurance,” Whelan said.

“Any passengers that use a ride-hailing service, or any motorist offering a ride-hailing service, should be aware of the high level of uncertainty about how insurance policies may respond as a result of an incident.
 
"We urge all drivers to speak to their insurance providers before engaging in a commercial and illegal service such as ride-hailing."