Another Ridesharing Policy, Another Underlying Risk

Another insurer has entered into Ontario’s ridesharing insurance market. Effective December 1, 2016, Northbridge Insurance provides ridesharing coverage for users of RideCo., a Waterloo Region-based ridesharing company. The new product seeks to fill existing coverage gaps under Ontario’s standard Ontario Automobile Policy (OAP 1) when insureds are using their vehicles for RideCo. However, the new policy still leaves coverage questions about how the new policy interplays with the vehicle’s underlying policy.

Background

Like UberX, RideCo is an online, app-based ridesharing company that operates in Waterloo Region. According to its Web site:

RideCo lets you book personalized, express transit service. You simply search and book a ride on our mobile app. Our technology will do the work to schedule professional transportation to fulfill your ride booking. What is unique is that you will share that ride with other passengers, therefore making it affordable—near to the cost of driving yourself. RideCo’s technology ensures that your rides will be fast, without ever being too crowded.

Like UberX, RideCo uses “driving partners” to service its users. Driving partners are drivers who use their personal vehicles to driver RideCo passengers from Point A to Point B, for a fee.

However, section 1.8.1 of the OAP 1 contains an exclusion that precludes coverage if the vehicle is being used as a taxicab or to carry paid passengers. This means that every time a RideCo driving partner is using her vehicle to deliver RideCo passengers, her policy does not provide Ontario’s mandatory automobile insurance coverage. This would expose the owner and driver to personal liability and potential charges for driving without insurance.

New Ridesharing Policy

RideCo’s policy bares many similarities to UberX’s policy (unveiled in July 2016). The new policy is a fleet policy that is issued directly to RideCo Inc. The named insureds under the policy include RideCo and any “rideshare driver” or “rideshare vehicle owner” – when they are logged into the RideCo app.

There is no coverage under the policy when the driver is not logged onto the RideCo app. If the driver is not logged in, coverage under the driver/owner’s personal policy for the automobile (the underlying policy) is applicable.

Like the UberX policy, the RideCo policy becomes “primary” over the underlying vehicle policy when it is triggered. It provides standard coverage during the “Pre-Acceptance Period” (the period starts when the driver logs into the app and ends when the driver accepts a delivery request) for accident benefits, uninsured motorist coverage, third party liability coverage ($1 million limits), and Family Protection Coverage ($1 million limits). If the driver has collision and comprehensive coverage on their personal policy, the RideCo policy will also provide those coverages with a $1,000 deductible.

When a driver accepts a ride request, the liability and Family Protection limits double ($2 million). This “Post-Acceptance Period” ends when the last passenger departs from the automobile or the trip is ended or cancelled, whichever is later.

Interestingly, the RideCo policy also offers two additional coverages during the Post Acceptance period: Up to $1,500 for transportation replacement (OPCF 20) and the Removing Depreciation Deduction (OPCF 43) – but only if the underlying policy insuring the vehicle has those coverages in force at the time of a loss.

Old Ridesharing Risks

When UberX announced its new Intact policy in July, I cautioned that underlying insurers might not want to be “underlying vehicle insurers” if their insureds are using their vehicles for ridesharing activities. The RideCo and UberX policies do not necessarily remove all of the risks that underlying vehicle insurers face when their insureds are using their vehicles to drive for those companies.

FSCO cautions ridesharing drivers about driving without consulting their underlying insurers first:

If you use or drive for other ridesharing companies, you may not be protected under your own personal auto policy against certain damages and losses or in case of injury to yourself or others.

Find out if you’re covered. Check with your auto insurance representative and ridesharing company. The proper coverage must protect vehicle owners, drivers, passengers and others.

Northbridge’s RideCo webpage provides a similar warning and hints at a possible business opportunity for insurers that do wish to embrace ridesharing activities [emphasis in original):

All RideCo drivers are automatically covered by Northbridge Insurance’s commercial policy without having to contact Northbridge Insurance. However, all drivers must first ensure their personal auto policy allows for their vehicle to be used for ridesharing. Please inform your personal auto insurance broker of your ridesharing activities to ensure you can be covered by Northbridge Insurance’s commercial policy.

Ridesharing not allowed under your policy?

Talk to your insurance broker about other personal auto insurance options that will allow for ridesharing.

It will be interesting to see whether underlying insurers will support or avoid insuring vehicles that are involved with insured ridesharing activities.

For more on the UberX policy, see my September 2016 article in Canadian Underwriter called Fleet’s In