In the first of what will doubtless be many decisions examining the coverage of a rideshare policy, in Northbridge v Intact (May 15, 2008), Arbitrator Vance Cooper found that a careful reading of the ridesharing policy mandated priority of the accident benefits claim to that policy. 

The insurers agreed that the Coverage for Ridesharing Endorsement – IPCF 6TN – included priority for the driver’s claim. The dispute was over priority of the uninsured passenger’s claim. 

Section 268(2) of the Insurance Act sets out the priority of insurers for the payment of accident benefits. The passenger in this case had no policy to respond to the claim (in that he was not a named insured, spouse, dependent, listed driver or regular user of an insured auto) and so sought recourse against the insurer of the automobile in which he was an occupant. Northbridge provided the personal insurance for the vehicle and Intact provided the ridesharing insurance for the vehicle. Arbitrator Cooper acknowledged that section 268(2) had not contemplated the competing coverage of a ridesharing policy. 

Despite concerns in the industry and media prior to the creation of these policies, the timing of the accident was not an issue relative to the use of Uber. The Uber fare paying passenger had already been picked up and was in the course of being taken to his destination when the accident occurred. This means that the accident occurred during the post-acceptance period which commences from the moment the driver accepts the request on the Uber app and ends at the later of when the last passenger departs from the car, the trip is ended or the trip is cancelled. 

Section 2 of the IPCF 6TN of Intact’s ridesharing policy clearly specifies that Intact provides primary coverage for the automobile only while it is being used in the pre-acceptance and post-acceptance periods.

The standard OAP 1 auto policy in Northbridge’s insurance excludes coverage if the vehicle is being used to carry paying passengers, meaning that every time a driver is operating a vehicle for Uber, he is technically in breach of the OAP 1 and driving without coverage. 

Arbitrator Cooper stated,

It is one thing for Ali P. to transport family and friends in his vehicle as a courtesy or favour. In these cases, such occupants could well look to Northbridge for accident benefit coverage. It is another thing for Ali P. to operate his vehicle for several hours per day and potentially for several or many days per week as a rideshare vehicle, take on unrelated and unknown individuals for compensation and for such individuals to look to Northbridge for accident benefit coverage. This is a risk specifically contemplated by Intact under its ridesharing endorsement. Presumably, Intact received premiums to address this risk.

Arbitrator Cooper found that section 2 of the IPCF 6TN clearly provided that Intact’s insurance was primary if the vehicle was being used in the pre-acceptance or post-acceptance periods. 

This decision is in keeping with the stated purpose of the ridesharing policies wherein the ridesharing coverage actually managed to fill in the gaps in personal insurance coverage that have been of such concern since the rise of Uber and other ridesharing companies. That said, there are those (including presumably Intact) who will say that the language of the IPCF 6TN does not clearly operate to extend coverage to the passenger as found by Arbitrator Cooper, and this “common sense” approach to resolving the dispute may not accord with the letter of the law.  It is not yet clear whether Intact is seeking to appeal from this decision.  We do know that if it does, Arbitrator Cooper will be entitled to deference and a reasonableness standard of review will be applied.

Maia Abbas is a member of both the Priority/Loss Transfer Disputes practice group and the Sharing Economy practice group. If you have a question about a ride sharing claim, please contact Maia