Insurance company Aviva now backing Uber

Insurance company Aviva Canada has plans to support Uber drivers with special coverage, a move that could give comfort to users of the ride-sharing service, and one that will likely disrupt the taxi industry.
Aviva said they are responding to the growing use of ride-sharing services and the need to protect both passengers and drivers.
“When consumer needs change, we must evolve our insurance solutions to respond,” Greg Somerville, president and CEO of Aviva Canada said in a statement.
“We’re excited to offer a simple and affordable solution within a driver’s existing personal auto policy, thereby providing drivers and passengers with absolute peace of mind that they have insurance coverage while ride-sharing.”
The coverage will protect those contracted with UberX from the moment they initiate looking for passengers through to collecting and dropping off those passengers.
The coverage will become available for Ontario drivers early next month. Aviva Canada is working to expand it across the country.
Aviva said eligibility will be based on some simple underwriting criteria such as a maximum of eight passengers, having been a licensed driver for a minimum of six years, and no other commercial use, among other stipulations.
“The coverage will be available for drivers that spend up to 20 hours a week participating in ride-sharing. The cost for the additional coverage will equate to a small portion of the income earned by the driver, calculated using factors such as time spent ride-sharing, area driven and driving record,” Aviva said.
Last year, Uber said it was working with Intact Financial to create a ridesharing insurance plan. Currently, Uber notes that “every ride on the UberX platform in Canada is backed by $5,000,000 [$5 million] of contingent auto liability insurance covering bodily injury and property damage.”
Toronto, like many cities around the world, is struggling to monitor ridesharing services like Uber. There are concerns the service is skirting local bylaws by using a mobile app to charge riders.
UberX, which has regular drivers transporting people in their private cars, doesn’t have commercial licenses and therefore lack the regulation and oversight of traditional taxi companies. Taxi companies have argued that this puts passenger safety in jeopardy while simultaneously driving traditional cabbies out of business.

Aviva to offer insurance for UberX drivers

Drivers who operate ride-share services like UberX could soon have insurance that covers them, if a new policy proposed by insurance provider Aviva comes to fruition.

The policy, which could be added to existing personal policies, was announced by Aviva on Wednesday, and is squarely aimed at services like UberX, spokesperson Glenn Cooper said, though he added the policy will also cover other services that might pop up in the future.

“Uber is obviously aware [of the policy], but this is a product from Aviva,” he said.

Aviva has yet to formally file the policy with insurance regulators, despite touting a February start date in their announcement. Cooper said he expects the company to file “very soon.”

It’s the second time a company has proposed a ride-sharing insurance policy. In September 2015, Intact Insurance announced a similar policy, with no expected start date. They have also not formally filed with regulators, a spokesperson confirmed Wednesday.

The announcement comes in the midst of growing pressure among insurance providers to answer a question over whether modern ridesharing services require commercial or personal insurance.

Pete Karageorgos, spokesperson for the Insurance Bureau of Canada, said he expects other companies will follow suit with similar announcements.

“It’s a competitive environment out there. Companies are going to make decisions in terms of meeting customer needs,” Karageorgos said.

Aviva had previously cancelled insurance policies for drivers found to be working as drivers for UberX.

Uber has previously said the $5 million of contingent auto liability insurance its drivers are covered by means every ride is sufficiently insured.

Susie Heath, a spokesperson for Uber, said the company is “encouraged” by Aviva’s announcement.

“We remain committed to working with insurance companies and regulators across Canadian jurisdictions to quickly offer viable insurance products that embrace ridesharing,” Heath said in an e-mail.

Critics of UberX have argued the company isn’t sufficiently insuring its drivers. Kristine Hubbard, spokesperson for Beck Taxi, said the announcement by Aviva highlights the lack of proper insurance UberX drivers have.

“Based on today’s laws … UberX is operating illegally and without sufficient insurance of drivers and passengers,” Hubbard said.

A spokesperson for Finance Minister Charles Sousa said in an email that the ministry “is committed to supporting the ongoing development of [the sharing economy] while promoting a level playing field for businesses and ensuring consumers are protected.”

Aviva’s policy, if it gets approved, will limit drivers to 20 hours of for-profit ridesharing a week. Cooper said that decision was based on the company’s belief that most drivers using services like UberX do so on a part-time basis. Those who drive full-time will not have an insurance option when the policy launched, he said.

“If you’re doing this over 20 hours we need to have a different conversation. Are you becoming a full-time taxi driver,” he said.

The policy will hopefully not only be attractive to UberX drivers, he said, but other workers in the sharing economy, such as delivery services.

“This is just going to continue to evolve, and we’re going to continue to evolve with it,” Cooper said.