RNZ are reporting that confusion has broken out over what type of insurance Uber drivers need.
The report, aired on their morning report today and can be heard here
The Uber approach, of advising their drivers to only take Third Party only cover, if it is true, raises a lot of questions, for both drivers and their potential passengers.
In the event of a crash, be it fault or non fault, whilst the vehicle is being used for the commercial purpose of a taxi, would a private insurance pay out at all, or would the Insurer look to void the policy? I suspect, in the vast majority of cases, they would avoid the policy – in other words treat it as though it had never been in force.
This means that there would be no insurance cover for third parties – which is exactly what the Passengers of a vehicle are. ACC would still be the first port of call for injury to passengers of course, but no more, so some types of claims, to property and other things would not be covered by the driver’s erstwhile cover.
For drivers too, a third party only cover gives them no chance of claiming for theft or own damage in fault or single vehicle claims – even if the insurer deemed their policy to be in force. This might well spell loss of earnings, and result in significant repair and other costs.
The standard third party liability cover for Motor Insurance in New Zealand generally starts at $5,000,000 and can be as high as $20,000,000, so for the company to boast of it’s $5,000,000 USD contingency is somewhat surprising.
There are also anecdotal incidents of the NZ Police fining drivers without a Passenger endorsement on their Driving Licence and for their cars not having a CoF – two things that the regulated industry has to have.
As a passenger and potential customer, I would want to know if the ride I am booking is safe, up to standard and covered. And a responsible driver would want the same thing.
The RNZ story:
One Uber driver says the company only requires drivers to have third party private insurance instead of more expensive commercial insurance, RNZ reports.
Many private insurance policies won’t cover drivers if they are driving for commercial purposes.