The last quarter of 2022 saw the highest number of new driver sign-ups ever for Uber in Canada. Indeed, with the gig economy booming, many Canadians are turning to ride-share driving as a source of income.
Whether you’re already one of these Uber drivers or are considering a gig with Uber or another ride-share company, you may wonder whether you need special ride-sharing insurance. The short answer is yes.
Key takeaways
- Regular auto insurance policies typically do not cover ride-share activities, which means it's essential to understand your insurance options to protect yourself and your passengers
- Consider options like commercial insurance and third-party liability coverage
- Consult with your personal auto insurance provider to explore tailored coverage options
Understanding ride-share driving
Ride-share driving encompasses a range of services where drivers use their personal vehicles to transport passengers in exchange for a fee. This includes popular companies like Uber and Lyft. As more people turn to this type of work, the need for appropriate coverage has become increasingly important.
When you use your personal vehicle for ride-sharing, your insurance needs to change. It’s important to differentiate between purely personal use and ride-share use of your vehicle, as this distinction affects your coverage. If you plan to drive for a ride-share service, it’s important to ensure you have sufficient coverage for potential risks associated with transporting passengers.
Personal auto insurance vs. ride-share insurance
A personal car insurance policy is designed to cover everyday driving activities like commuting to work, running errands or taking a trip. This policy generally includes liability coverage, which protects you if you’re at fault in an accident. However, personal policies do not typically extend to activities considered commercial, such as becoming a ride-share driver and transporting paying passengers.
Please note that this definition differs for each province so be sure to check your regions’ requirements.
Why personal insurance doesn’t cover ride-share driving
Most personal auto insurance policies exclude coverage for activities that fall outside of “personal use.” This means that if you're using your vehicle for ride-sharing but an accident covered by your personal auto insurance policy occurs – you may still be denied coverage. As such, ride-share companies often offer additional coverage, but these policies usually only apply while you're actively transporting a passenger or waiting for a ride request.
Your personal auto insurance policy typically excludes:
- Accidents that occur while actively driving for a ride-share service
- Liability for injuries to passengers while they’re in your vehicle for ride-share purposes
- Damage to your vehicle caused by passengers during the ride
These exclusions mean that if you’re relying solely on personal auto coverage, you may find yourself financially responsible for costs arising from accidents related to ride-sharing.
The need for special insurance
As the landscape of ride-sharing continues to evolve, understanding your insurance requirements becomes increasingly important.
Standard auto insurance policies often fall short when it comes to protecting you during business use, highlighting the necessity for specialized insurance that can address the specific needs of drivers in the gig economy.
Aviva’s ride-sharing add-on
Aviva offers ride-sharing insurance for individuals who work as part-time drivers and use their own vehicles. There are a number of eligibility conditions including but not limited to: your vehicle can only carry a maximum of eight people (including the driver) and cannot be used for commercial services, such as food delivery. You also cannot be registered as a taxi or limousine. Check with your insurer for the latest set of eligibility requirements
If you have an auto insurance policy with Aviva and you would like to drive for a ride-sharing service such as Uber you must add our ride-share coverage to your policy. This add-on allows you to use your vehicle to participate in a ride-sharing service and covers you and your passengers under your personal auto policy.
Call your insurance representative to add this coverage to your auto insurance policy with us.
Steps to ensure proper coverage
When it comes to securing the right insurance for your ride-share activities, taking proactive steps is essential.
Consult with an insurance representative
Understanding your specific coverage needs and navigating the various options available can be daunting. This is where consulting with an insurance representative becomes invaluable. They can provide personalized guidance tailored to your situation, helping you assess your current policy and identify any gaps in coverage. By working together, you can ensure that you’re adequately protected, allowing you to focus on driving without worrying about potential financial pitfalls.
The best way to ensure you have the right coverage is to consult with a personal auto insurance provider. Discuss your driving habits and how you plan to use your vehicle. They can help you navigate your options, ensuring you have adequate protection for ride-share driving. This might include adding an endorsement to your existing policy or exploring dedicated ride-share insurance.
Compare insurance quotes
When looking for the right insurance, consider obtaining quotes from multiple providers. Pay attention to:
- Coverage limits: Ensure you have adequate liability coverage and additional protection, such as comprehensive and collision coverage
- Policy exclusions: Read the fine print to understand what is and isn’t covered
- Premium costs: Balance your need for sufficient insurance with what you can afford
Protect your business and your customers
If you’re driving for Uber or any other ride-share service, you need special insurance. A standard personal auto policy will not adequately protect you during ride-share activities.
By obtaining the right auto insurance policy and adding necessary coverage like third-party liability coverage and uninsured/underinsured motorist coverage, you can ensure that you, your passengers and your vehicle are fully protected.
Do you use your car for business? Find out more about personal car insurance and business use.
