The insurance industry keeps a close eye on the different innovations that mark our society since they often impact P&C insurance.

These include remunerated passenger transportation services, car or home rentals on sharing platforms and the arrival of automated vehicles on our roads.

While attractive, these activities have a significant impact on insurance.  Whatever the innovation, the focus of IBC’s activities is to better understand what this means for insurance, so that we can identify and appropriately meet the needs of consumers.

Sharing economy

Myriad activities and services have been developed in recent years for which consumers can offer services and receive remuneration. 

Do you rent out your vehicle or home? Then you need to speak to your insurer.

Your auto and home insurance policies are designed to cover your personal activities. You need to let your auto insurer know if you suddenly decide to rent out your vehicle. Want to earn extra money by renting out your apartment? Your home insurer needs to know that too.

These and the other activities that use your personal property to generate income significantly change how your insurer evaluates the risk. In home insurance, a number of insurers have adapted their products and accept that your home can be rented out on occasion.

It is important to declare your new activities to your insurer. That way you will know if it will accept to insure them and under what terms. If not, you may not be compensated if a loss occurs.

Driver offering remunerated passenger transportation services

You must of course inform your insurer and let it know that your vehicle is also used to transport passengers for remuneration. 

Since this type of service is relatively new, the Québec government authorized a pilot project and a bespoke insurance product was developed to meet the needs.  When a driver is available to offer transportation services, compensation for damage will be paid out under the operator's policy, in accordance with the coverage purchased by the driver under his personal auto insurance policy.

An individual who carries out this type of activity needs to know that the insurance coverage he chose for his vehicle will also be the coverage that will apply if he has an accident while driving as a chauffeur.

Commercial rental activities on the rise

Remember that the objective of the home insurance policy is to cover risks in your private life.

In a recent study published by the Canadian Journal of Urban Research, half the services offered in Canada by these new platforms are run by commercial operators. This trend is also being confirmed in Québec, where such activity has become less and less occasional. Rather, it has become a way to earn a regular income and is therefore a commercial activity. In fact, a Ministry of Tourism draft regulation targeting tourist accommodation provides for tighter regulations for renting a secondary residence.
IBC is keeping a close eye on these debates and the legislative changes pending.

University research to better understand the phenomenon

To better understand the needs of suppliers of goods or services in the sharing economy, IBC also mandated a university research centre to look at the issue. Using different specialists, this research will allow us to better understand these emerging activities, identify the insurance issues and promote the development of products and practices adapted to these new realities.

Group P&C insurance : IBC working to get it permitted in Québec

Group P&C insurance is an insurance product that covers the property and activities of a group of individuals under a master insurance policy offered by a company.

Group life insurance already exists in Québec. In fact, in a number of companies, employees benefit from group insurance, which covers them in case of death or disability, and reimburses their medical and dental care expenses. The policy is established based on a group of individuals, not the individual himself. 

For IBC, this type of product constitutes an excellent way to insure individuals and activities related to the sharing economy.  This is why IBC has for several years lobbied to get the Québec legislation changed to allow the development of this kind of product in P&C insurance. 

Automated vehicles

The advent of automated vehicles on Québec roads is very much a reality as the first autonomous minibus pilot project got underway on public roads in Candiac in 2018.

While still in its early stages, the fully automated vehicle will travel throughout the country in the foreseeable future. And this will create major changes, notably in auto insurance.

Currently in Québec, the risk reflects the person who drives the vehicle. Risk evaluation, premiums, auto insurance policies and claims settlement are driver based.  

When technology replaces the driver of a vehicle, certain components of the Québec automobile insurance plan will need to be reviewed and adapted.

Compensation after an accident

Thanks to the compensation terms and conditions of our auto insurance plan, policyholders are compensated easily and quickly.  

Under the direct compensation plan, the insurer indemnifies its client for property damage and does not recover the pay-out from the party at fault (the driver himself or his insurer). For bodily injury, compensation is paid by the Société de l’assurance automobile du Québec (SAAQ), which does not take into account the liability of the user in the accident.

These compensation rules have demonstrated clear benefits over the years: policyholders are effectively protected and are indemnified quickly after an accident. This right needs to be preserved for the future.

Losses and vehicle repairs

Highway safety specialists forecast that the advent of automated vehicles could make roads safer, by reducing the number of road accidents. 

However, this type of vehicle, with its many technology components, will cost more to repair or replace. This will therefore require the industry to make major updates, whether in terms of damage appraisal standards and procedures, or the skills of repairers.  

Data sharing

The technology inherent in automated vehicles means that they will be able to register and collect an appreciable quantity of data. This will inevitably raise questions about product liability, whether for the components of the vehicle itself or the software that operates it.

For IBC, the key is to have this data be accessible and shared between manufacturers, vehicle owners and insurers. Such sharing would help determine the cause of the collision, vehicle mode (manual or automated) at the time of the accident, driver interface with technology, etc. All information essential to be able to settle claims and, if applicable, obtain legal recourse.

The consumer at the heart of the decisions

There is no doubt that the arrival of automated vehicles on our roads will require major adjustments to policies, practices and legislation. More specifically, the regulations governing vehicles will have to be reviewed to ensure vehicle safety.

Adapting to this new reality also means that the various levels of government, regulatory authorities, insurers and other stakeholders will have to work together more closely. This must be done by keeping policyholders at the heart of the decisions, to ensure they will not only be appropriately protected, but also compensated fairly and quickly after a loss.