By Brent L. Handel Q.C.
What is Uber?
As many of you are aware “Uber” is a ride-sharing business which uses a smartphone whereby you may request a ride. The ride is provided by a private vehicle owner who has signed up to give rides in exchange for a fee. The business recently opened in Calgary and Edmonton, Alberta.
However, you should be aware of something extremely important with respect to the validity of the insurance on the vehicle you are riding in with Uber. The owner/operator of the car very likely has a private motor vehicle policy which has a clause which specifically provides that the auto policy is void if the vehicle is being used for commercial purposes, one of which is “providing rides to others in exchange for money or other goods and/or services.”
Uber Insurance Issue in Alberta
Thus, an Uber owner/operator would clearly fall under this section which would void the automobile policy. This would be tragic in a collision, both for the Uber driver who would not have insurance on his vehicle which could be written off, and the passenger who may be injured by the fault of the Uber driver as there would not be any insurance on the vehicle for the innocent victim to access to pay for his/her bodily injury claim.
The passenger/innocent victim would then be in a situation of an uninsured driver which means the victim could bring a claim against the Motor-Vehicle Accident Claims Fund – but only up to $200,000. For serious injuries or a fatality this amount would easily be exhausted and so then the innocent victim would have to bring an action under his/her own auto policy, assuming the victim’s policy has an SEF 44 endorsement or Family Protection Endorsement, which provides that if you are injured by an uninsured driver your own policy will pay benefits up to whatever your liability limit is. Thus if you have a $2 million liability limit, your SEF 44 insurance will compensate you up to that amount. However, there is still the same issue with commercial use and the SEF 44 insurance company may deny coverage on the basis that the passenger was engaged in a commercial service.
Uber is well aware of the problem and states it is their biggest obstacle at present. No doubt! So Uber has said they will provide contingent insurance to drivers – but acknowledges this is an interim measure. Even if this insurance exists, suing Uber who does not have a registered office in Alberta, raises the whole complicated mess of companies from foreign countries operating in Canada over the internet. How do you sue them? Where do you serve them? Will an Alberta court allow the claim? Not the kind of mess one wants to find one in as a seriously injured victim of a collision.
Therefore, if you’re using an Uber “taxi” then you should ask the owner/driver if he/she has a commercial policy and ask to see a copy of it. Or you may want to ask yourself is it worth the risk of being in an uninsured vehicle in an effort to save a couple of bucks on a taxi.
Handel Law Firm is Alberta’s serious personal injury and fatal accident law firm serving the cities and areas of Red Deer, Fort McMurray and Grande Prairie.