The sharing economy, also known as the collaborative economy, continued to expand in 2017. The new sharing-based business models are unconventional and, in most cases, are not compatible with current insurance coverages. In order to foster adequate consumer protection, it is essential to adapt insurance to the growing needs of sharing economy participants.
Insurance products, particularly automobile insurance products, are ownership based and thus not always suited to the needs of this new clientele.
Indeed, users of third-party vehicles who are not vehicle owners cannot purchase endorsement Q.E.F. No. 27 – Civil liability resulting from damage caused to vehicles of which named insured is not owner (“QEF 27”) as this endorsement is attached to Q.P.F. No. 1 – Owners’ Form (“QPF 1”).
The sharing economy fosters the development of peer-to-peer vehicle-sharing platforms, which generally do not provide any insurance coverage. When a vehicle is shared, a borrower who is not a vehicle owner could be required to pay for the repair of the borrowed vehicle if they are involved in an accident and are at fault.
Moreover, collision damage waivers proposed by short-term vehicle leasing companies are often expensive. In many cases, the lessee who does not own a vehicle has no other choice but to purchase such coverage if they do not want to pay for damage caused to the leased vehicle.
The Autorité des marchés financiers (the “AMF”) believes that, with a few changes, Q.P.F. No. 2 – Driver’s Form (“QPF 2”) can meet the growing demand of non-owner users. In particular, the policy covers the driver’s civil liability for third-party injury or damage (Section A) and loss of or damage to the borrowed or leased vehicle (Section B).
In view of the above, the AMF and the Groupement des assureurs automobiles have established a working group to revise the wording of QPF 2 and adapt it to the needs of consumers who are not vehicle owners.
To achieve this objective, the following intentions were set:
- QPF 2 will be a stand-alone policy so that insureds do not have to refer to the applicable clauses in QPF 1, contrary to what is prescribed by the current form.
- The policy will only include civil liability insurance; Section B will be withdrawn as this policy provides only insurance for third-party injury or damage, including loss of or damage to the leased or borrowed vehicle.
- The insurer will be able to determine the kind of vehicles it intends to cover, as is the case in QEF 27.
- The insurer will be able to indicate an insurance limit, either per vehicle or per occurrence, for loss of or damage caused to the vehicle, as is the case in QEF 27.
- The policy will only be offered to drivers who are not vehicle owners.
- Although only the named insured will be covered, the insurer will be able to issue a policy with more than one named insured (e.g., spouse).
This new automobile insurance policy is currently being drafted. Its publication is scheduled for March 2019.
For more information
AMF Information Centre:
Québec City: 418 525-0337
Montréal: 514 395-0337
Toll-free: 1-877-525-0337: 1 877 525-0337
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