Passengers looking to hail a ride via their smartphones in Alberta now have peace of mind that their ride-share driver has the necessary insurance. The Alberta government has introduced new insurance policy reform, just two days shy of the July 1 deadline imposed by Bill 16.
The new legislation, which was originally passed in early spring but put on ice until the policy could be developed, will require all ride-share drivers to have $2-million commercial coverage. Alberta is the first province to provide such a policy, which will be in force as soon as a driver engages a ride share app to pick up a customer.
The ride share coverage market is already growing in the province. Following the the green light,
Intact Financial Corporation has rolled out a policy developed in partnership with Uber that the ride share company can purchase directly, rather than individual drivers.
It’s an approach Karim Hirji, senior vice president of International & Ventures at Intact, feels will be a more effective way to ensure drivers have the coverage they need.
“When you look at this from a regulatory and licensing perspective, I think there’s a general sense in most municipalities that the bylaws put the onus on the transportation companies to ensure their drivers have the proper insurance,” he says. “From a TNC perspective, they either put in place a methodology to ensure all 40,000 of their drivers have insurance and enforce it on a day-to-day basis, or they could actually purchase the policy themselves.”
He adds that from a public policy perspective, Uber purchasing its own coverage for drivers will go a long way in providing passengers with the certainty their driver is covered – an area that remains grey in other markets like Toronto and Mississauga where individual drivers can obtain a commercial endorsement.
“We’ve seen the personal lines endorsement approach, especially in the U.S., and when you take the sharing economy as a whole, it really hinges on simplicity and participation,” he says. “The simpler we can make this for drivers, the easier it will be to ensure that passengers can feel they’re protected.”
He adds that there are potential plans to expand the product, for which
Aon is the broker, into Ontario.
“In Ontario, July 15 is the big date when city bylaws come into effect, and we’ve been very much working actively with the ministry of finance and FSCO,” he says. “We’re very optimistic that we’ll have a bigger product structure to announce in the next few weeks.”
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