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Uber and Car Insurance in Ontario: Clash of the Titans

Uber is a really cool service. Using an App, you can get essentially get a taxi fare for a fraction of the price, with less wait time as well. The App tells you exactly what distance you’ve traveled, and how much the fare cost. The fare cost is then debited directly from your credit card to pay the driver. You can chose to tip the driver if you wish. You can also leave comments or ratings about that Uber experience and that particular driver. If one driver or vehicle has too many negative comments, then the driver won’t be allowed to use to service to provide others with rides. I must admit that all of the lawyers and staff here at Goldfinger Law love Uber and the service which it provides.

For your ordinary person looking to make a few extra dollars on the side driving people around; Uber is a blessing. Especially for those people who don’t have enough money to afford an expensive taxi license.

For those taxi drivers who have toiled with the long hard house and the red tape with respect to taxi licensing, Uber is undercutting their business. They aren’t following the same rules which apply to your ordinary taxi driver.

City Hall in Toronto has yet to sort out the details of how Uber will work on a go forward basis. Some cities have essentially regulated Uber and other ride sharing services. In Vancouver, you can’t use a ride sharing service like Uber for a fare which costs under $75. This has essentially killed Uber’s business out there where the fares tend to be short and fast ones.

An interesting story recently came out in the news involving an UberX driver named Tawfiq Alam. Mr. Alam was operating his vehicle on an UberX trip for a passenger. En route to their final destination, Mr. Alam’s UberX vehicle was struck by another car. The accident doesn’t appear to be his fault. Mr. Alam sustained some pretty serious injuries as a result of the car accident. While I have never met Mr. Alam, let’s just say for arguments sake that he will need all sorts of services which aren’t covered by OHIP/Healthcare; including but not limited to physiotherapy, massage, chiropractic treatment, psychological counselling, occupational therapy and speech language pathology just to name a few. He may even need attendant care benefits, and an income replacement benefit because he’s too injured to return to work. You get the picture.

Mr. Alam had car insurance at the time of the accident. He thought he was protected. Having car insurance in place, you would certainly think that Mr. Alam would be protected and covered by his insurer. In case you’d like to know, Mr. Alam’s insurer at the time of the car crash was The Co-Operators. They’re the ones with the bubbly and fluffy ads that make you feel all warm and fuzzy inside.

Mr. Alam made a claim for Statutory No Fault Accident Benefits to the Co-Operators. He filled out all of the requisite forms to make a claim (and there are a lot of them).

Upon receiving the Application for Accident benefits, Co-Operators informed Mr. Alam and their lawyer that he would NOT be covered for accident benefits by the Co-Operators under Mr. Alam’s standard automobile insurance policy.

Why not?

Good question. Co-Operators took the position that as an UberX driver; even as an occasional one; that Mr. Alam was now operating his vehicle for commercial purposes. Mr. Alam did not disclose this to the Co-Operators. It’s against a standard automobile policy to operate a motor vehicle for commercial purposes without first disclosing it to your insurer. There are different terms for commercial vehicles, along with different rates which apply. When Mr. Alam signed up for car insurance with the Co-Operators, he likely signed a personal policy for ordinary everyday use. There are not specification or rates which take in to consideration the COMMERCIAL use or operation of a motor vehicle. Had the Co-Operators known this, they would have tacked on additional provisions to the car insurance policy, and likely also charged Mr. Alam a higher premium to use his car for commercial use.

Mr. Alam now has no other recourse other than to make a claim against Uber for his accident benefits. The reality is that he will likely have to wait a long time for those accident benefits to get sorted out. Who is going to pay for all of his treatment, attendant care or income replacement benefits while he’s off work and injured? If it’s not going to be the Co-Operators, and if Uber refuses as well; then what’s Mr. Alam to do? Waiting for a Court date, or a hearing date at the Financial Services Commission of Ontario (FSCO) where accident benefit disputes are heard can take months and months, if not years. He can certainly bring an urgent Hearing of an Issue Application to FSCO which would likely be his fastest recourse in the circumstance. None of these options are optimal, particularly for a person who thought he was covered prior to the car accident.

And this is where the problem lies here in Ontario. There are likely thousands of Uber and UberX drivers on the roads. How many think they are covered by their own insurers, only to find out AFTER a car accident that they aren’t because they haven’t disclosed to their own insurers that they’re operating their vehicles for commercial purposes.uber-logo

I can see where the Co-Operators are coming from on this one. I’m curious to see how Uber handles it. Their coverage may be for liability and Third Party protection alone; and NOT take in to consideration Statutory Accident Benefits or first party coverage in Ontario. If that’s the case, there will be A LOT of angry UberX drivers out there who all may difficulty dealing with the Courts and FSCO in finding that Uber is responsible to pay for those benefits. The most interesting thing is that Uber does NOT make their policies of insurance public. All they say is that they have their own LIABILITY coverage (not accident benefit coverage). What Uber’s own liability coverage entails is a mystery to lawyer, Uber customers and the general public alike.

So: for now, if you’re planning on making a few bucks on the side being an Uber driver; take this lawyer’s advice. Instead of waiting to see how the Courts deal with it, make sure that you’re covered and inform your own car insurance company that you do in fact use your vehicle or operate a vehicle for commercial use through Uber. That way, your insurer won’t be surprised if/when such a claim comes down the pipes. You’re just acting in good faith, as you would hope your insurer acts towards you. You’re also giving the insurance company one LESS reason to deny your claim.


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