The auto insurance industry in Canada has been warned that it must keep up with the rise of ride-sharing companies such as Uber. Adam Mitchell, president of Mitchell & Whale Insurance Brokers Ltd. in Whitby, Ont. spoke to CBS News and stated insurers and brokers need to create products that cater to the ride-sharing space.
“Insurance needs to keep up … It’s one of the stodgiest old industries, that hasn’t innovated and hasn’t been totally disrupted yet.”
However, contrary to that, Aviva Canada has been in innovative mood recently and launched an auto insurance policy that is oriented to ride-sharing drivers. At the moment the policy is only available in Ontario, but Aviva is known to be working with other provincial governments to expand the coverage.
Mitchell says other insurance providers need to follow Aviva’s lead and tap into a potentially huge market that Uber is creating with its expansion around the country. Of course, the U.S. company is hardly having a smooth transition from one Canadian city to the next, with most trying to block the UberX service, but nevertheless Uber has shown that it can create a potentially huge economy.
At the moment, Uber drivers (and indeed those of other ride-sharing companies) are operating their vehicles without sufficient auto insurance coverage. Almost all use their personal policies, which the Insurance Bureau of Canada issued said in 2014 would not be good enough to cover the owner in the case of a collision.
That means UberX drivers are effectively uninsured while carrying passengers. That is changing in Ontario with employees now able to take advantage of Aviva’s trail blazing coverage, but in other provinces the problem persists.