Insurers have applauded the ACT Government’s landmark decision to legalise Uber and other ride-sharing services, saying it paves the way for the industry to provide tailored motor cover.

The reform involves a two-stage process, including introduction of a customised compulsory third party (CTP) and property insurance regime for ride-sharing activities.

It also includes driver accreditation requirements, which will be introduced before Uber’s formal entry to the transport market on October 30.

“You can be certain insurers will swiftly respond to market forces by developing products that suit ride-hail drivers, and protect them and their passengers,” Insurance Council of Australia CEO Rob Whelan said.

He says a separate CTP regime will reduce the premium burden on private motorists.

It will “reflect the higher risk [ride-share drivers] are likely to represent due to spending, on average, more time on the road. It also means that, like taxi and hire car drivers, their higher CTP premiums will deliver adequate funds to meet claims, without forcing private motorists to subsidise their costs.”

NRMA Insurance says the ACT Government’s decision provides “clarity and consistency” in the regulatory treatment of ride-sharing services.

“This will better protect drivers and passengers, provide a level playing field for traditional transport providers and ultimately raise the bar for safety in the broader transport industry,” EGM Product and Underwriting Tracy Green said.

“We look forward to working with the ACT Government as it develops a customised CTP and property insurance regime tailored to the sharing economy.”

The ACT Government says allowing ride-sharing services helps improve travel options.

“Public transport is an integral part of any city,” Minister Assisting the Chief Minister on Transport Reform Shane Rattenbury said. “These reforms are a win for Canberrans and those travelling to the territory, improving access to diverse transport options and competitive pricing.”

The ACT is the first jurisdiction in the country to allow ride-sharing services. Victoria is expected to place the service under regulation in the near future. But in NSW, the authorities have declared Uber services illegal and fined and suspended Uber drivers.