How Does Ridesharing Affect My Auto Insurance?
We’ve all heard of companies like Uber and Lyft, where people can offer rideshares to the public using their personal vehicle. These services are coming onto the scene across Canada at a rapid pace. The lower costs associated are revolutionizing the transportation industry.
Rideshare companies are known as Transportation Network Companies (TNC). They connect passengers with drivers to provide arranged transportation through a network for compensation. Just like taxi services, these situations pose an extra layer of liability: the more people in the car, the higher the degree of injury or damage should an accident occur. It’s important to contact your insurance broker before you start offering rideshares to ensure you and anyone else involved in any potential dangerous situation is covered.
Becoming a Driver?
Once it’s available, you might decide to become an Uber driver. It’s a part of a sharing economy that can help the public and makes you money. However, using your personal vehicle for the service means it will ultimately affect your personal auto insurance policy.
Insurance companies have developed products to address the insurance coverage gap when vehicles are used in a ride sharing or car sharing situation. A new standard auto insurance policy form called SPF No. 9 was just approved for use in Nova Scotia and provides clarity on insurance for TNC drivers. It goes over coverage for 3 potential situations:
- Period 1: Driver has logged onto a TNC network for the purpose of providing transportation services but has not accepted a ride request
- Period 2: Driver has accepted a ride request and is en route to pick up passenger
- Period 3: Passenger(s) are in the vehicle, being transported, and ending when the last passenger departs from the vehicle
These situations will require a higher amount of minimum liability—most likely $2 million. These limits and changes should be in place before you offer your first ride. If optional physical damage insurance has been purchased by the TNC you’re working for, coverage for your vehicle is still contingent on you carrying coverage on your own policy.
Using TNC Services
Although the SPF9 has been approved, it does not mean that the TNC operating that you choose to use has purchased the policy. Be sure to confirm the network and its drivers have the appropriate insurance coverage, too. You can ask for proof of coverage, usually available digitally on the TNC’s app.
It’s important to note that even if a driver has purchased the SPF9 policy add-on, and you know they have the right insurance, coverage is only in place if you use the actual networking application to arrange the ride. Street-hailed rides are an exclusion.
Nova Scotia Ridesharing
Licensing rules have been changed to allow for more people to qualify for a Class 4, which is needed to operate a transportation service. Contact your auto insurance broker today to make sure you’re covered!