IAG has rejected a complaint of misleading conduct made by the Australian Taxi Industry Association (ATIA) in relation to NRMA Insurance’s decision to cover UberX drivers.

The ATIA told the Australian Competition and Consumer Commission (ACCC) that because the ride-sharing service is illegal in all states and territories, NRMA Insurance should not cover its drivers and their privately owned vehicles.

But NRMA Insurance and its parent IAG are unrepentant.

“Our first priority is to protect our customers when they need us, so we have made the decision to cover them if they choose to use their car this way,” an IAG spokesman told insuranceNEWS.com.au.

The complaint to the ACCC follows an elaborate secret-shopper operation by ATIA CEO Blair Davies, who “tested” NRMA Insurance’s online quoting system by applying for comprehensive car insurance for a vehicle to be used for UberX services.

“I disclosed that the vehicle would be used for private and business purposes and would travel more than 20,000 kilometres per year,” Mr Davies said in his complaint to the ACCC.

“NRMA’s online quoting process did not request any further information on the nature of the business purpose, including whether the vehicle would be used for providing ride-hailing [UberX] services.”

Mr Davies was quoted a premium of $307.93, which came with a product disclosure statement that – under the heading “general exclusions for all cover” – said: “We don’t provide cover if… your vehicle was being used… for illegal purposes or in an illegal manner.”

When Mr Davies rang NRMA Insurance’s call centre to confirm the policy would cover UberX services and say the vehicle could be used for half of its time this way, the insurer confirmed the policy would cover UberX services, but the premium was adjusted to $871.70.

Mr Davies believes this contravenes NRMA Insurance’s declaration that it will not cover vehicles used for illegal purposes.

As well as complaining to the ACCC, he also wrote to IAG CEO Mike Wilkins.

In response, IAG Personal Insurance CEO Andy Cornish has acknowledged ride-hailing services are a “relatively new concept in Australia” and that “the regulation of these… services is controversial”.

He says “a number of state and territory governments have started reviews”, which he hopes will provide “greater clarity on the legal status of these services”.

IAG expects changes permitting ride-hailing services are “inevitable” and “we believe as an insurer that we should protect our customers to the best of our ability as these changes occur”.

“As a customer-led organisation, NRMA Insurance has decided to provide certainty to its customers by clarifying that it provides coverage for people who use their cars to provide occasional ride-hailing services such as UberX.”

Mr Davies says his complaint to the ACCC should not be interpreted as an attack on the insurance industry.

“We’re not against the insurance industry or NRMA [Insurance],” he told insuranceNEWS.com.au. “The insurance industry is just as disrupted as the taxi industry when it comes to these services.”

An NRMA Insurance spokesman says the company has not received formal notification from the ACCC regarding the ATIA’s complaint. She has reiterated the position of IAG and NRMA Insurance that “the sharing economy is here to stay”.

The ACCC says it does not comment on complaints it has received.