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Uber raising rates in Pa., Del., and elsewhere to encourage drivers to join insurance program

The 5-cents-per-mile hike can be used to cover the 3.75 cents-per-mile cost of the insurance.

Uber will increase its rates by 5 cents per mile in Pennsylvania and seven other states as part of a plan aimed at getting drivers to opt in to an injury-protection insurance program.

Drivers in the states that are part of the pilot program — also including Delaware, South Carolina, West Virginia, Illinois, Arizona, Oklahoma, and Massachusetts — received an email on Tuesday notifying them of the program.

The fare increase will cover the 3.75 cents per mile cost of the insurance for those drivers who choose to participate. Drivers who don't take the coverage will get to pocket the increase.

"We believe drivers should have a low-cost option to protect themselves and their family against rare and unforeseen accidents that prevent them from working," said Uber spokesman Craig Ewer.

The company partnered with the insurance companies OneBeacon and Aon for the program, which Uber hopes to expand to other states.

It provides drivers with an option to obtain coverage for medical expenses, disability income replacement and survivor benefits resulting from a work-related accident. The maximum payout for an incident would be $1 million, according to a statement from Gus Fuldner,  head of Safety and Insurance at Uber.

The coverage applies the entire time the driver is on the Uber app but the premiums are charged based only passenger mileage, according to the company.

"We are partnering to pilot and insurance product that allows drivers to access piece of mind for a few cents a mile, directly through the Uber app," said Ewer.