Grab Drivers! Do You Have the Right Car Insurance and Coverage?
Insurance for e-hailing
As living costs rise, it’s only natural to find ways to bolster and add to your income. And with the booming internet-age gig economy, it is relatively easy to make extra cash – and fast!
However, with these modern jobs and businesses come a slew of modern concerns.
One such concern that is worthy of serious reflection is the lack of proper insurance for chore-based jobs. More specifically, with e-hailing, which by now you probably already know all about.
Just in case you don’t, e-hailing is a transport service that you can order via an electronic device like your phone or tablet computer and the drivers that service you are everyday folks with cars.
If you are planning on becoming an e-hailing driver with Grab or a similar company, you’ll need to take note of the insurance situation.
You don’t want to be surprised with a rejected claim after an incident has occurred.
But firstly, have you taken a look at the expiry date of your car insurance and road tax? If it's due to lapse inside 60 days, you can start the renewal process now.
Does Grab offer insurance to their drivers?
In Malaysia, the most popular service is Grab and in the wake of Uber’s departure from South East Asia, other similar ride-sharing companies are gaining traction, such as MyCar, Mula and JomRides.
Since the majority of e-hailing drivers are currently signed on to Grab, let’s take a look at how they cover their drivers.
For starters, Grab does offer personal accident insurance to their drivers and passengers.
It generally covers both rider and driver for accidental death, permanent disablement, and medical expenses (for injuries sustained as a result of an accident during a covered trip with Grab).
However, it does not cover a host of other unfortunate events that could happen while servicing passengers.
For instance, as a Grab driver, if an accident occurs with damages to your car, you will not be able to claim from the personal accident insurance offered by Grab (this falls under the domain of car insurance coverage).
Nor will you be covered for third party damages or legal liabilities to or of passengers.
And accidents do happen...
A FMT article from 2017 told the plight of one Grab driver who could not claim compensation when a passenger alighted as a motorcycle passed, causing an accident and damage to his car.
The driver was refused his claim from Grab and his private car insurance company as well.
His insurance did not cover damages from accidents that occur during commercial trips, which is typical for most private plans, but more on this in the next section.
Thus, even though a driver has some coverage from Grab, it’s clear that it isn’t enough.
But things are changing!
Following meaty discussions between our Transport Ministry and our JPJ, a raft of changes have been implemented following complaints from a large majority of Grab drivers. Here are two you need to know as an e-hailing driver:
1. Vehicle usage code
Previously, e-hailing drivers were required to change the usage code of their vehicles from individual private to e-hailing private vehicle (AH). This requirement is no longer in force.
2. Public Service Vehicle license (PSV)
Any vehicle to be sued for e-hailing services will require a PSV license, passenger insurance, e-hailing sticker, and an e-hailing vehicle permit (EVP from the Land Public Transport Agency.
| See also: What is Motor Personal Accident Insurance? |
What about private car insurance?
Most, if not all, standalone private car insurance coverage, whether ‘comprehensive’ or ‘third party’, does not cover incidents that occur during commercial activities (as mentioned).
This basically means that if you are using your car to make money directly i.e. by driving for Grab or other similar services, you can’t claim coverage if an accident occurs during the course of the trip.
Some may be thinking that if you use your car to drive to work – aren’t you technically using it to earn and make money? Thankfully, in most cases, driving to and from work is considered personal use.
One important piece of advice: Attempting to file false claims with your car insurance provider is a big no-no as it can land you in very hot water.
Remember that to claim from your car insurance policy, you must first lodge a police report.
Now if you make false claims in your report i.e. saying that you were driving your car for personal reasons when you were, in fact, driving a passenger around, you are liable to be fined, jailed – or both!
So what are my insurance options?
Right now, your coverage options as an e-hailing driver is rather limited.
There is a notable gap between the coverage provided by the service itself (typically only personal accident insurance as offered by Grab) and by conventional private car insurance.
The estimated cost of adding e-hailing insurance is approximately RM400 a year according to Grab.
Still, you do have options for better coverage as an e-hailing driver.
Enter e-hailing driver car insurance add-ons
There are a number of providers who are able to offer protection to all of us Grab drivers out there.
AXA SmartDrive - Sharing
For instance, AXA SmartDrive - Sharing is an add-on to the comprehensive car insurance policy that you currently own. Whether you are a Grab driver making your rounds or you have just clocked out, it provides all-in-one 24/7 protection for yourself, your vehicle as well as other third-party road users.
Allianz is another provider of e-hailing add-on cover for the Malaysian market.
Apart from the legal liabilities offered to third parties and fare-paying passengers (even negligent acts are covered), the authorised driver also stands to gain Personal Accident cover of RM50,000 due to accidental injury or death.
MSIG E-Hail E-Zee
Another such option is the upcoming E-Hail E-Zee add-on to the comprehensive car insurance policy offered by MSIG Motor.
This add-on also includes personal accident insurance for the driver where he or she will be covered for accidental death and permanent disablement.
It also covers own damage and loss to the driver’s car (while servicing passengers), third party damage and bodily injury, as well as the legal liabilities to and of passengers.
Drivers will also enjoy its Motor Assist programme as part of the MSIG Motor Comprehensive plan. Best of all, the premium is expected to be affordable still.
If you're an e-hailing driver, then you definitely need to get e-hailing add-on for your own protection and those whom you ferry. After all, it's a source of income you want to protect, no?
The cost of these add-ons? E-hailing optional add-ons are risk-based and will depend on several factors such as the sum insured for the vehicle and additional policyholder information. On a side note, this new add-on appears to be one of many new add-ons arriving since the detariffication of motor insurance premiums in 2017.
Another potential option is commercial car insurance, but this type of plan might not be suitable for all, as you’ll need to register your car as a commercial vehicle. You’ll likely also pay more in premiums, among others.
Depending on the policy, there may be limitations on the coverage when drivers take on passengers for hire or reward – which is the essence of e-hailing.
So the moral of the story is – even though e-hailing is providing an incredible option to supplement your income and for some, serve as a full-time job – do consider its potential implications.
Going without the right insurance can be seriously costly.
Are you looking for a car insurance plan that makes the most sense for you? Look no further!
Our car insurance comparison tool can help you review, compare and discover the best plan for your needs and affordability!