Will Lyft be insured in Toronto?

Published: November 22, 2017

Updated: July 24, 2018

Author: Luke Jones

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Ride-sharing giant Lyft announced last week it will come to Toronto before the end of the year, marking its first expansion outside the United States. While the company will provide clear competition to Uber, will it fall under the ride-sharing regulations and insurance demands introduced last year?

One expert is worried that Lyft has not prepared by securing insurance partners. Uber linked with auto insurance giant Intact Insurance to allow its drivers to be covered in the Toronto market.

“I am concerned because I have not yet heard that Lyft has contracted with anyone to provide similar arrangements” as Uber, Eric Grossman, a lawyer with Toronto-based Zarek Taylor Grossman Hanhrahan LLP told Canadian Underwriter on Monday. “Presumably, they would need to do so to conform with the laws here.

“Lyft is in the same circumstances as Uber was – virtually every private automobile insurance policy has a restriction in it that precludes the vehicle from being operated for hire,” he added.

Even Uber’s auto insurance legitimacy is the topic of debate.

“We understand if you’re a driver of an Uber vehicle, priority is supposed to go to the Uber policy when it’s being used as an Uber,” Grossman said. “But what if you’re a passenger in that Uber policy?”

Passengers in an Uber vehicles who are not from Ontario, don’t drive, or have never been insured do not have a priority, Grossman argues. In these cases, who would the go to for a claim? He also points to a scenario where a passenger gets out of the car after being dropped off and the driver shuts off the app:

“They are not technically, based on this endorsement, covered on the Uber policy because they do not have a paying fare and they are not trolling for one,” Grossman said. “So in that circumstance, would the underlying policy of insurance have to respond? Arguably, yes, and would that underwriter of that private vehicle policy say, ‘You know what? That’s not part of the risk that we ever undertook.’”

It is worth mentioning Lyft has yet to discuss the details of its launch, so insurance partnerships could be announced in the future. However, the company will face many of the unclear grey areas that have befallen Uber’s insurance model.