Erb and Erb now offers insurance coverage for Uber drivers

A local broker is offering a new insurance policy for anyone operating as an Uber driver, even though the ride-sharing service and others like it remain illegal in Waterloo Region.

Kitchener-based Erb and Erb Insurance Brokers began selling the insurance, developed by Aviva Canada, on Feb. 1 for anyone carrying passengers for a fee.

That means Uber drivers will at least be able to operate with insurance, as they wait for the region to regulate ride-hailing services.

"The last thing you want to do in get into a car with someone who doesn't have that coverage," Michael Brattman told Craig Norris, host of CBC Radio's The Morning Edition, on Wednesday.

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Uber has been operating in Waterloo Region since July and many drivers operate without liability coverage. That means that although passengers pay to use the service, in the event of an accident, insurance companies won't cover the driver or the passenger involved.

Filling a gap

"You're paying compensation, they get into an accident and the insurance company's not going to pay for their car or injuries that are sustained as a result of a that," Brattman said.

Personal car insurance doesn't cover customers who pay for transportation. Insurance policies for commercial taxi drivers, who spend the bulk of their day looking for or carrying fares, can cost between six and 10 thousand dollars.

Brattman says his company's new insurance policy fills the gap between personal and commercial insurance. It works as add-on to a driver's existing policy and costs about $430 each year, depending on a person's driving record.

"It's much more affordable," Brattman adds, because the policy covers drivers who offer rides for up to 20 hours per week.

Evolving needs

The policy offers full coverage for collisions, thefts and vandalism like regular car insurance, according to Erb and Erb's website, but also covers repairs resulting from an accident while carrying a paying customer, injury benefits for both drivers and passengers, legal fees and offers protection from the point of pick up until a passenger is dropped off.

Brattman acknowledges that Uber remains illegal in Waterloo region at the moment, but says he hopes that will soon change.

As a broker, Brattman says he isn't looking to justify illegal activity. Instead, he says insurance offerings need to adapt as shared services such as Uber and Airbnb increasingly become the norm.  

On Tuesday, councillor Jane Mitchell told CBC News that the region is looking to Edmonton and other US cities to develop a bylaw that would bring Uber, taxis, and limousines under a single legal umbrella that would apply to any vehicle for hire. Public consultations on the legislation will be held in the spring.