Cedric Stephens | Rideshare insurance

This column failed spectacularly when it omitted to discuss in the years preceding 2020 the possibility of a global pandemic. Ample evidence existed then to suggest that such an event was likely.

The fact that many other persons and institutions, locally and overseas, also got it wrong provides no comfort. These thoughts ran through my mind as I read General Accident Insurance Company Jamaica Managing Director Sharon Donaldson’s letter to this newspaper editor on April 6.

Her letter was mistakenly headlined ‘clarifications’ to comments in my last article, ‘Business Interruption Liability Needs More Study’. It amplified statements attributed to Mrs Donaldson in a speech she gave to members of the Kiwanis Club of Montego Bay. My piece was a critique of her address. Mrs Donaldson’s letter clarified her earlier remarks and revealed that our views about the liability of local insurers’ for COVID-19 business interruption losses were not far apart.

This column scored a big hit when it discussed in January 2017 the possibility of what Gleaner Business Reporter Steven Jackson recently called ‘Silicon Valley-based Uber Technologies’ coming to Jamaica. Plans are now in place, according to that reporter, for the rideshare company to enter the local transportation market. “Uber sent out notifications to potential operators … for persons to register as drivers,” The Gleaner reported.” One notification read: “We are celebrating that we are reaching more and more countries around the world. This time, Jamaica. Soon Uber’s app will be available in Kingston and you will have a new alternative to earn moving around the city.”

Interested drivers must be 21 years of age or older, have a 2010 or newer model year vehicle and present a valid driver’s licence, registration and insurance.

Many persons will see Uber’s future entry into the transportation sector as an opportunity to earn extra money, much in the same way that others saw income-earning opportunities with Airbnb. I suspect that the former will turn out to be far more popular than the latter. There are thousands of cars sitting idle in and around Kingston, St Andrew, and St Catherine due to the practice of working from home.

What are the motor insurance implications if one were to sign up with Uber?

I wrote in 2017 that the insurance issues concerning ride-sharing companies like Uber are anything but simple. Private motor policies exclude liability when vehicles are used for ‘hire or reward’ like carrying fare-paying passengers.

My certificate of insurance, for example, says the policy excludes ‘use for hire or reward’ or ‘use in connection with any trade or business’. I interpreted that to mean that if I were to become a member of the Uber network and used my vehicle from time to time to carry fare-paying customers to earn extra money, there would be no coverage when the vehicle was being used in that manner.

My 2021 certificate of insurance contains the same exclusions.

Ride-sharing companies generally do not provide insurance coverage while drivers are using their vehicles for private purposes. Varying forms of protection are, however, available from them while the driver is logged into their network waiting for a ride request, en route to pick up passengers and while transporting passengers.

Coverage terminates when the journey ends, allowing the driver’s insurance to kick in. Put more simply, the ride-sharing company’s insurance is designed to fill the gaps in the car owner’s insurance coverage. Information obtained from Uber’s website summarises the details of the insurance it provides as follow:

1. Offline or the driver app is off: Driver’s insurance applies;

2. Available or awaiting a ride request: Uber maintains the following auto insurance on your behalf in case of a covered accident;

3. Third-party liability if driver’s auto insurance does not apply:

• US$50,000 in bodily injury per person;

• US$100,000 in bodily injury per accident;

• US$25,000 in property damage per accident;

4. En route to pick up riders and during trips:

• US$1 million third-party liability;

• Uninsured/underinsured motorist bodily injury;

• Contingent comprehensive and collision: i) Up to actual cash value of a car with a US$2,500 deductible (effective 3/1/2021); ii) Certain vehicles offered through the vehicle marketplace are subject to a US$1,000 deductible.

The coverage limits are higher than the minimum limits stated in Jamaica’s Motor Vehicles Insurance (Third-Party Risks) Act. Details – aka fine print – are very important in insurance contracts and, in an ideal world, I would need to examine the coverage documents instead of relying exclusively on information extracted from a website.

On the other hand, Uber is a global company and, therefore, it would be fair to assume that the coverage would meet minimum standards. The other bugbear is that no information was provided about how claims would be handled. Despite these reservations, would I sign up to become a part-time driver? You bet!

- Cedric E. Stephens provides independent information and advice about the management of risks and insurance. For free information or counsel, write to: aegis@flowja.com