March 5, 2020
Uber or Lyft? Protect Yourself When Ridesharing
Ridesharing services like Lyft and Uber are popular ways to not only get听around, but to earn money.听Whether you鈥檙e a passenger hailing a ride, or the driver answering that call,听know how it impacts your听insurance coverage.听听
Ridesharing uses mobile technology to connect passengers to drivers, usually using their personal car. The app also allows users to get price quotes for their trips, track the driver鈥檚 location and pay the fare using a credit card on file. These services are provided by transportation network companies (TNCs). Lyft and Uber are the two major TNCs but there are others.听听
TOP CONSIDERATIONS听
Ridesharing vs. taxi:听Ridesharing is not the same as taking a taxi or limousine. Limos and taxis听are听licensed by the state and/or local transportation authority听and the vehicles听have听been inspected. Taxi operators are required to have insurance that protects a passenger and third parties, such as pedestrians or other drivers, in case of an accident that causes bodily injury or damage.听听
Gaps听in coverage for ridesharing drivers:听There听can听be gaps听in coverage between a driver鈥檚 personal automobile insurance policy and the commercial policy maintained by the TNC.听
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Personal auto insurance听typically excludes coverage for business use or when drivers are available for hire. Your personal coverage may be impacted, regardless if you are 鈥渙n the clock鈥.听
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TNCs only provide contingent liability coverage.听If there is an accident, only third parties are covered for limited damages. This could leave the driver paying for physical damage to the vehicle and听liable for听personal injury. The driver could also be on the hook if the vehicle is hit by an uninsured or underinsured听driver.听
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TNC insurance.听Uber and Lyft offer contingent collision and comprehensive coverage while the driver is actively engaged in a ride鈥搈eaning the driver has accepted a ride request or has a passenger in the vehicle. Collision and comprehensive coverage听are听only available听for drivers who have elected to purchase these coverages on their personal auto insurance.听听听
Freelance rides may not be covered:听TNC coverage typically only applies while you have the app turned on. If you have turned off the app or you accept a street hail, you may not be covered. Failure to maintain the appropriate coverage could result in听fines or听loss of your license.听听
HOW TO PROTECT YOURSELF听
For ridesharing passengers:听听
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Research the companies operating in your city.听Find out what insurance policies the TNC has听in place听to protect drivers and passengers,听including听how much liability coverage these policies offer. This information may be available on the TNC鈥檚 websites.听听
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Talk to your insurance provider.听Your personal auto policy will likely provide you some coverage when you are a passenger. If you don鈥檛 own a car, consider purchasing a named non-owner policy, which provides coverage for you above any insurance the vehicle鈥檚 owner may have. These policies include protection for bodily injury or property damage, medical payments, and uninsured/underinsured motorist. In certain no-fault states, they may also include personal injury protection (PIP).听
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Ask your driver to provide proof of coverage.听Be wary of drivers who turn the app off or ask for cash payment.听
For ridesharing drivers:听听
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Ask about its commercial policy.听Questions听include: How much liability insurance does the TNC provide while your transporting a passenger? Will you be charged a deductible and what is it? Is the commercial liability insurance coverage your main source of coverage or is it contingent on denial by your personal auto policy? How do you report a claim?听
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Find out what is covered by the TNC鈥檚 commercial policy.听Consider a variety of circumstances, including: you are available for hire, but听have听not accepted a ride request; you are logged into the app and are on your way to pick up a passenger; you are logged into the app and transporting a passenger; you鈥檙e听not logged into the app and not transporting a passenger.听听
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Explore coverage specifically for TNC drivers.听Several insurers offer products to fill coverage gaps and many insurers are now offering products specifically designed for ridesharing drivers. The premiums, type of coverage and limits available vary by insurer. Some polices only cover the period when you鈥檙e logged into a TNC app but have not accepted a ride request; others provide commercial auto coverage and apply regardless of whether you鈥檙e working. Availability of TNC coverage varies by state. Check with your insurance provider to find out more.听
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Know what type of coverage is required by law.听Several states have passed laws to regulate TNCs. In some states, laws determine what a driver is required to disclose. Many states have laws听requiring you to maintain proof of TNC coverage in the vehicle when you are available for hire or logged into the app. Several states require you to tell your personal auto insurer and anyone involved in the claim investigation whether or not you were logged into a TNC app and available for hire at the time of the accident. A few states also require the driver or the TNC to notify any lenders with an interest in the vehicle if it will be used for TNC services.听听
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TOP THREE THINGS TO REMEMBER听
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Whether a passenger in or a driver for a ridesharing service, know exactly what coverage the听transportation network company (TNC) like Uber or Lyft听offers you.听
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Talk with your insurance provider to see what products they offer to fill in the gaps.听听
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Ridesharing laws vary by state, so make sure to know what type of coverage is required by law.
About the National Association of Insurance Commissioners
As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (不良研究所官方) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the 不良研究所官方, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. 不良研究所官方 staff supports these efforts and represents the collective views of state regulators domestically and internationally.