Category Archives: Uber Insurance

South Africa, Uber Insurance

Uber Car Insurance in South Africa

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Finding an insurance plan that serves the interest of rideshare drivers could be considered a cause for concern within the industry.

There’s no doubt that Uber provides quite a different approach to transportation system and this sometimes creates a bit of complication for related industries. The lawmakers in some countries don’t know where or how to group Uber. The insurance companies don’t know how to go about covering Uber drivers and their vehicles – there is a struggle to find the right balance to protect all invested parties. In addition to this,

Uber has also transformed what car ownership means, especially since private car owners can give their cars up on the platform. Before now, private car insurance accounted for every scenario that a car owner could get into while commuting in their vehicle. Since the inception of ridesharing has made it possible for private car owners to commercialize their vehicles, it has become quite problematic for insurance companies to cover many Uber drivers under a regular private car plan. Also, private insurance plans are built to cover incidents involving a car owned by a person and used exclusively by them.

To throw a wrench into the works, ridesharing as a business is not entirely equal to commercial transportation, hence, insurance companies can neither cover Uber drivers under private plans nor subject them to the same pricey procedure that cover taxis and other transportation providers.

To protect its drivers, Uber sometimes enter into deals with Insurance companies in certain countries to secure adequate Insurance cover for Uber drivers and partners. One of such countries is South Africa.

 

Uber Car Insurance Requirements?

Before we delve into Insurance firms in South Africa, let us quickly review Uber car insurance requirements in South Africa, just as a reminder:

The insurance requirements to drive with Uber are:

  • Third party property damage
  • Passenger Liability cover to the value of R5 Million per annum
  • Minimum R50,000 personal accident cover per vehicle passenger

While uploading your Insurance documents:

  • Upload a clear / readable copy of your Vehicle Insurance Policy
  • Vehicle Registration Number has to match the vehicle that is on your Uber account
  • Ensure the policy clearly states the vehicle is insured for a Business Use. Private Use will not be accepted
  • Ensure the policy clearly states the vehicle is comprehensively insured
  • Ensure the Policy Number is clear / readable
  • States Insurance Provider Name

With comprehensive vehicle insurance, there is adequate insurance provision made for drivers for private and commercial purposes. 

 

Review of Insurance Firms in South Africa for Ride sharing

 

Insurance firms exist in huge numbers. However, finding a firm that has taken time to tailor its services to suit the needs of Uber drivers can prove problematic. Hence, Uber has negotiated a good deal with VUM insurance brokers on behalf of Uber partners and drivers where drivers pay for just the kilometres they drive and premium is deducted from the driver’s weekly fares.

VUM Insurance (Vulindlela Underwriting Managers)

Pricing

  • Pricing based on a per km rate.
  • Initial base rate of 23c per kilometre, for vehicle value ranges between R190 000 and R210 000.
  • Where vehicles are not owner operated, a 30% increase will be applied.
  • Base rate is adjusted each month depending on driver behaviour and driver’s uber rating. Rates adjusted to as low as 17c per km for low risk driver-partners.

Cover & Premiums

  • Premium per vehicle for full comprehensive cover, includes passenger liability, personal accident cover (R50 000 per individual), SASRIA and roadside assistance. Premium also includes the cost of the Theft/Hijacking Recovery System, as well as the Telematics Fee.

 

GIB Insurance

Another typically fair Insurance is provided at GIB insurance. The brokers at this firm will provide you with competitive rates that ensure that you have the ‘insured peace’ that you want. Their offer is specifically built for rideshare drivers and this is a major criterion when choosing what insurance firm to use – you need to find a firm that answers your ‘Uber car insurance questions’. You can contact the firm by using the mail: [email protected]. Alternatively, you could contact the brokers Himal Daya or Rosalee de Buys on 011-483-1212 to get well vetted information on how to solve your insurance related issues.

 

Nice to Know

If you want to become an Uber partner in South Africa, it is necessary to know that you will utilize a certain amount of money for fuel and on other costs like car maintenance, insurance costs, car depreciation, and Uber royalties. If you are looking to do proper due diligence before acquiring a car and want to assess the profitability of Uber as a business whether as a one man business (a sole Uber driver), or as an Entrepreneur with multiple Uber cars in his/her fleet, then either of our Uber Kits at the top right of the linked page:

We hope this post alleviates your worries about Insurance. If you are outside South Africa, visit the Uber office in your city to discover if good Insurance deals like this exist in your city.

 

 

Other Links:

For our blog posts on some of Uber’s Services, see the links below:

For other popular posts you might be interested in, check the links below:

 

Uber car insurance
Uber Insurance, Uber Partner

Perspectives on Uber Insurance From an Industry Expert

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Given the state of uncertainty as regards auto insurance for an Uber driver, especially in the United States, we decided to do a Q & A session (Question and Answer session) with Eugene J. Solomon, an Insurance expert licensed in multiple states and with over 25 years of experience.

Eugene has an interesting take on insurance for Uber drivers and leans more towards commercial insurance for Uber drivers (as a rule of thumb).  He also answers a lot of questions that Uber drivers have regarding coverage, and what to do if you get into an accident whilst driving with Uber. Read the full Q & A below to find out his expert opinion and general thoughts as it relates to Uber and insurance.

 

a) What is your name?

Eugene J. Solomon.

 

b) Where do you work, and what is your position/title?

My company is “Southern California”, and I am the Agency Principal.

 

c) What does your job entail?

We are a full service independent brokerage firm assisting clients with Auto, Home, Umbrella, Business, and Life Insurance

 

d) How long have you been in the insurance industry?

I began as a Claims Adjuster in 1990 before becoming a Full Time Agent in 1993

 

e) Where do you stand on the widespread notion that Uber is disrupting long held industry regulations? (Specifically relating to insurance)

If an industry is stagnated it’s important to have innovative companies come along and challenge those stagnant business models.  Regulation in itself can also be stagnant and should respond to the marketplace.

 

f) What is your general opinion on the Uber business?

I’m excited about Uber generally and what they can do.  Increased access for senior citizens who may not find cabs to service their area in addition to the job opportunities Uber creates; leave me with a positive impression. The convenience is incredible.

 

g) What is the conflict between the business model of Uber and standard insurance policies?

Uber’s innovative model disrupts the traditional insurance model by having a hybrid usage of your personal automobile.  Using your car as a livery conveyance and a personal auto is not something most insurance companies are prepared for.

 

h) What are the various types of insurance policies that impact an Uber partner and/or driver?

For Auto Insurance there are generally two categories:  Personal Auto and Commercial Auto.  Personal Umbrella Policies may be negatively impacted by driving with Uber as the underlying coverage may not be appropriate.

Editor’s Note – Our expert talks more about commercial insurance in the follow up questions.

 

i) What does an Uber driver need to do from the start of the business to ensure that they never have an insurance related problem?

The safest strategy is to insure your vehicle as a Commercial Vehicle right off the bat. As these policies are more expensive, factor the additional cost of insurance into your business plan.  If your vehicle is insured as a Commercial Vehicle, you should be able to avoid coverage issues that may arise if you only had a Personal Auto Policy.

Commercial Insurance allows for usages not typically covered under a personal use policy.  [Furthermore], Commercial Policies typically have much higher Liability Limits than personal use policies. Most, if not all, personal insurance policies exclude Livery, carrying passengers for a fee.

Our opinion is Commercial Insurance policies suit the Uber driver best.  Some companies are offering an Endorsement on personal auto polices but they can be just as expensive as a commercial policy.

Editor’s note– Your selection of insurance should be influenced by cost as well as coverage, since you are running a business. Also, depending on the class of Uber service you intend to run under, commercial insurance might not be necessary. See our UberX kit, and Uber Black kit’s for more information on this.

 

j) How does an Uber partner (with multiple drivers) go about insuring a fleet of cars intended to be used for Uber?

The most effective way to handle a fleet would be a Commercial Auto Policy.  Discounts and fleet pricing will help lower the cost vs. stand- alone coverage for each vehicle.[Also,] with luxury vehicles you may have additional equipment to insure.  However, from a standard coverage standpoint the basics [previously discussed] apply.

Also, if you have a fleet of vehicles to operate consider how you may want to insulate yourself from Liability claims.  Should you have Business Insurance?  An LLC or Corporation? Do you have multiple drivers and what is their relationship to you? Are your drivers classified as Independent Contractors or Employees?  Some States such as California have a presumption [that such a worker is an employee].  Have a candid conversation with an independent broker who represents many companies.

 

k) Can an insurance company just decide not to cover an Uber driver’s car when it is involved in an accident?

Most insurance provided by Uber with James River is Secondary to your individual policy.  First and best practice is to take a picture of the license plate of the other vehicle.  Document the scene and incident the best way possible – photos, witnesses, and police report.  If you have Uninsured Motorist Coverage, then injuries may be covered.  If you have Collision insurance and are insured properly, your vehicle damage may be covered.

 

l) If the answer to the previous question is yes, what are the possible situations?

An Insurance company can’t just decline a claim: They must have an investigation and valid reason to decline, pointing to an “Exclusion” contained in your policy.  If an Exclusion doesn’t apply they may point to your application with the insurance agent.  The agent would have asked about the vehicle usage (For example:  How many miles to and from work?  How many miles per year? Any other drivers?  Any passengers for a fee?). You sign the application and are held to the responses contained therein. If the company can determine you misrepresented any of the above they can “rescind” the contract and it’s as if you were never insured at all. It is very tough for insurance companies to deny a claim.  In California, for example, they may be accused of “Bad Faith” denying the claim in error which could lead to a large judgment against the company.  Each state will vary.

 

m) Why doesn’t Uber create a comprehensive Master Policy for Uber drivers?

Creating a Master Policy for all drivers could be good for the drivers but likely bad for Uber.  Master or Group pricing gives preferential and easier underwriting, higher coverage and lower prices for driver/owners.  However, by having a group policy another barrier is taken down toward defining Uber as a transportation employer rather than a tech company.

 

n) As an expert, would you say that Uber is obligated to cover their drivers?

My opinion is they should cover drivers as the primary insurance provider [from the moment the driver is available to pick up passengers].  Any business relationship is based on mutual trust and respect.  Uber drivers should be treated as equal partners in this enterprise.  Uber is not successful without their hard working network of drivers.

 

o) What documents will one need in the process of setting up an insurance policy for an Uber vehicle?

Driver information- names, ages, driver license numbers, garaging address, and vehicle identification numbers.

 

p) What is your general advice for Uber drivers who have been turned away from insurance companies because they drive for Uber or other ridesharing companies?

Contact an independent broker.  Having choices of carriers to place you with means better pricing and a better coverage fit.

 

q) Can our readers reach you, if they are looking for an insurance quote for their Uber vehicle? If so, how can they?

You can reach us on our website www.solomoninsurance.com or me via email. Note-With all of the required information a policy can be written over the phone in 30 minutes or so.

 

r) Any last words of wisdom to our Uber drivers/ Entrepreneurs?

Don’t try to cut corners on cost. Be honest about your vehicle usage.  Enough insurance companies have come into the market where you will find something.  The money you save today could come back in multiples when you have an uncovered claim. Information will vary across States.

For more information about Eugene J. Solomon (National License Number 2608162), and to drop him a note follow the links below:

 

Eugene J. Solomon – Linkedin

Eugene J. Solomon – Website

Eugene J. Solomon – Email

 

To receive professionally vetted information that will assist you in running a profitable Uber business whilst staying insured download our Uber kit at the top right of this page.

 

Other Interesting Uber Related Posts

For our blog posts on some of Uber’s Services, see the links below:

For other popular posts you might be interested in, check the links below:

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Uber Insurance, Uber Partner

Uber Insurance Issues: Don’t Believe The Hype – You Can Be Fully Covered Without ‘Commercial’.

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How to Find an Uber Friendly Insurance Company Before Buying Your Cars

You may have heard this interesting fact, or rather scary gap, when you first spoke to an Uber driver – that they do indeed have automobile insurance for when you, the rider, were in their car and on an active uber ride, but that their car and they as an Uber driver were not covered between rides, on their way to get you, or on the way to their next fare. If that’s true, that is a lot of time of being on the road whilst not covered by insurance!

As an entrepreneur with a fleet of Uber Cars, you not only get to peek behind the curtain, but it is actually urgent that you are well aware of all the possible dangers (Uber Insurance Issues) and investment pitfalls that accompany ownership.

It is also important to separate fact from fiction. As an owner, you need to be sure you are always on the leading edge of information in this new and continuously expanding marketplace. The most important new fact is that thankfully, and likely because there is money in it, the industry is actually keeping pace with technology.

While it was true that in previous years to be fully covered any time one of your driver’s was behind the wheel you needed to have the total coverage and very costly professional commercial automobile insurance. Most owners found this to be priced far outside of their budgets as small business owners, given that commercial coverage is intended for large transportation firms.

Fortunately, several large carriers across the United States have recognized this gap in coverage and created a mid-level market for insurance, now effectively called ‘Rideshare Insurance’. Not every company offers this coverage yet. Some carriers, who might not approve of commercial for individually owned cars, may never offer it, but the good news is that we have found the market to be expanding and meeting this need.

You should begin by contacting the automobile insurance carrier or broker with whom you have an existing relationship. Even if that is just on your personal policy, which won’t be associated with your Uber fleet, it is well known that having some kind of driver or paying history will be of benefit to you when applying. Our uber kit offers you links and contact information for the carriers that have been successfully used for Rideshare Insurance policies. We encourage you to start your ownership responsibly with companies who want your business and understand your needs.

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