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Personal Lines Education Article
Ridesharing - Uber or Lyft -- Does my insurance cover me?
With ridesharing services like Uber and Lyft, now anyone with a smartphone can become a driver for hire where, instead of flagging down the car like a passing taxi, customers use a mobile app to request and pay for a ride. But here’s the catch. Since many of the drivers who work for ridesharing companies do not have a livery driver’s license and their cars are neither registered nor insured as commercial vehicles, it creates an insurance gap, or a period of time when they are underinsured and taking on more financial risk. Companies like Uber and Lyft are called a Transportation Network Company (TNC) and there are different coverage periods for these drivers. If you drive for a TNC, make sure you know the three distinct coverage periods and the insurance coverage you need at each time. Ridesharing insurance coverage varies during periods one, two and three Period one: The app is turned on and the driver is waiting for a fare. Period two: The fare has been accepted and the driver is on the way to pick up the passenger. Period three: The passenger is in the car .Right now, TNCs only provide full coverage in periods two and three, meaning drivers are likely to be underinsured during period one, which begins the moment they turn on the app, but before they accept a fare. And some drivers may not be aware of this gap in insurance coverage. If there is an accident during period one, the driver may be on the hook to cover the cost of some liability damages and have no coverage to repair their vehicle. Different ridesharing companies have different coverages during this period, so adding a specific rideshare gap endorsement onto their personal auto insurance policy could keep the driver fully insured. If you’re thinking about driving for a TNC, ask what level of coverage it provides during each period. Drivers should also contact their own auto insurer to address gaps, if any, in their liability protection. It is also recommended that TNC drivers review a copy of their TNC’s insurance contracts so they know the exact terms and conditions of the coverage. Knowing your insurance needs as a ridesharing driver doesn’t have to be complicated. Your local independent agent can help guide you through it and make sure you have the insurance protection you need. Grange Insurance offers ridesharing gap coverage that enables TNC drivers to fill in their gaps in coverage. If insurance policy coverage descriptions in this article conflict with the language in the policy, the language in the policy applies. To learn more about Grange’s ridesharing gap coverage, speak with your independent Grange agent.
Reference: - Insurance Information Institute