TORONTO • Aviva Canada Inc. has become the first auto insurer in Canada to develop a policy specifically for ride-sharing services, filling a gap in the market that has left many Uber drivers without proper coverage.
The Toronto-based company announced Wednesday that it will begin providing auto insurance to drivers who spend up to 20 hours a week working for a ride-sharing company such as Uber Technologies Inc.
The insurance will be available in Ontario in early February and will be expanded to other provinces “in the coming months,” as it receives regulatory approval.
“There’s a clear need for this — there’s a gap in coverage,” Aviva spokesman Glenn Cooper said in an interview.
“This is for those people who want to earn some extra cash, but also want to be protected and want their passengers to be protected.”
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In September, Uber said it was partnering with Toronto-based Intact Financial Corp. to design a new auto insurance policy for its drivers, but the two companies have yet to announce further details.
“We are in active discussions with regulators and members of government in Ontario, Alberta and Quebec as well as the (Insurance Bureau of Canada) from an industry perspective,” Intact spokeswoman Stephanie Sorensen said in an email.
“We are pleased at the response and engagement on the issue so far from all stakeholders and are optimistic that we will have product details to announce soon.”
Cooper said Aviva didn’t work with Uber and has designed its coverage so that it can apply to any other ride-sharing entrants in the future.
Uber hasn’t seen the details of Aviva’s policy, but is glad to see insurers getting on board, spokeswoman Susie Heath said.
“We are encouraged to see a growing number of Canada’s insurers show interest in innovation in the transportation space,” Heath said in an email.
“We remain committed to working with insurance companies and regulators across Canadian jurisdictions to quickly offer viable insurance products that embrace ride-sharing.”
To date, Uber drivers in Canada have been caught in a coverage limbo, with no insurance policy tailored to ride services outside the traditional taxi industry, for which drivers are required to get commercial insurance that is significantly more expensive than personal coverage.
Most Uber drivers have only personal insurance, but those policies don’t cover drivers who are transporting passengers for pay. This has resulted in some Uber drivers’ policies being invalidated in the event of an accident.
Aviva has developed what’s called an endorsement that would be added to a driver’s existing personal policy.
Cooper said this endorsement can cost as little as $600 a year on top of what the driver is already paying for his or her insurance, but the cost will vary depending on the policy-holder’s driving record, vehicle type, region and so on.
Coverage will be the same as the holder’s existing policy.
Aviva has been working with the Financial Services Commission of Ontario (FSCO), which regulates auto insurance in the province. The reason the coverage won’t be available until next month is because “some of the minor details still need to be worked out,” Cooper said.
FSCO spokesman Malon Edwards said the organization has “had some preliminary discussions with insurers and industry associations about possible insurance products for the ride-sharing economy, including Aviva Canada.”
Any new policies or endorsements have to be approved by the superintendent of financial services.
The Insurance Brokers Association of Ontario said it was pleased to see an insurance company taking a “proactive stance” in the ride-sharing space.
“Aviva’s approach and coverage options are welcome, as many of our members are struggling to provide clear insurance options for their customers to ensure they are properly covered,” president Doug Heaman said in a statement.