04 March 2015

Tempted by UberX? How might it affect your car insurance?

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Did you know that the UberX application is now available in Québec and that it enables you to provide paid transportation services to other individuals using your personal vehicle? If this concept seems tempting, read our advice to avoid running afoul of your car insurance!

What exactly is UberX?

Don’t worry. It’s not the name of a distant cousin but rather a voluntary taxi application. You begin by signing up and then offer transportation services to other registered members. Uber is not a taxi company. It’s a company that connects drivers with passengers.

Operating within the law

The Act respecting transportation service by taxi stipulates in section 4 that people must have a taxi owner’s permit to offer such services, whether they do so regularly or occasionally, and regardless of how drivers get in touch with clients (smartphone application, website, etc.). Under this same law (section 117), you are guilty of an offence and liable to a fine of $350 to $1,050 if you offer or provide passenger transportation for remuneration using an automobile but do not hold a taxi owner’s permit. Furthermore, section 71 states that your vehicle may be seized.

The difference between UberX and carpooling

  • Carpooling::

The driver is going from point A to point B and offering to take passengers and share the transportation costs. The expenses are paid by both the driver and the passengers.

For instance, Allo Stop is considered an organization that provides carpooling services, like travelling with colleagues to work.The key point is that the driver is following a pre-determined route from Point A to Point B and that the costs are shared among all occupants of the vehicle.

  • UberX :

In the case of UberX, what occurs is not carpooling. It involves drivers with no pre-determined itinerary using their vehicles to transport people to their destination for money, just like a taxi. Recruitment is through a mobile application.

UberX + auto insurance policy = exclusion

First you should know that your car insurance policy contains certain exclusions. What are they, you ask? Well, one concerns vehicles used as a taxi or as a vehicle provided with a driver. These exclusions could lead to the denial of claims for damage caused to your vehicle.

So, a piece of advice: contact your insurer to avoid disputes. Once informed, your insurance company could decide to increase your insurance premium or cancel your policy. If you do not inform your insurer, your compensation could be reduced or cancelled in the event of a claim.

Now that you know, the choice is yours. Drive safely!