With the rapid growth of individuals entering into employment with ride sharing companies, it is only natural that questions and confusion have arisen regarding insurance coverage and limitations in the event of a claim. Hello, it’s Chip Fridrich and today I will give you some insight in the ever changing world of insurance for drivers who work for services like Uber or Lyft.
First and foremost, let me absolutely urge those who are employed by ride sharing companies to have a conversation with their insurance agent (or better yet they can contact our agency) and discuss their policy current insurance policy to determine if it would respond in the event of an accident while they were acting as a driver. Not all companies in the marketplace are covering this exposure and that tells me that there are thousands of drivers out there at this very moment who are in danger of having uncovered claims because they do not have the proper coverage.
Insurance companies are reacting very slowly to provide the needed endorsements to cover this exposure. In essence they are in a “wait and see” mode to see what their peers are going to do. But the fact remains that there have been numerous claims that have been denied and this is becoming a hot issue with misinformation leading the way.
When a driver is not in “ride share operation” and going about their daily routine there is not an issue. Their personal auto policy will respond and cover them as usual. The “coverage gap” that has been publicized is when the ride share app is turned “on” and the insured (who is the driver) is available for hire but has not yet picked up a rider. Therein lies the coverage issue. When a driver has a customer in the car with them, coverage is picked up by the ride share company’s policy.
The endorsement that some companies are offering – and as I stated there are only a few that are doing so – will cover this gap in coverage. It will also provide excess physical damage for the driver’s car when they have picked up a customer. In other words, it will pay what the ride share company’s insurance won’t.
I have made it a habit whenever I ride with Uber or Lyft to ask the driver about their insurance. Some are aware of it but many do not have a clue. Drivers should be careful and should ask questions before they embark on this type of work. It should also be noted that these endorsements that can be added to your current auto policy are for part time ride share drivers. If you do this for a living (and thus you are basically a taxi driver) then there are a whole set of rules that apply to you regarding insurance.
If you have any further questions about how your insurance would respond in the event of a claim and you are a part time ride share driver, contact our office and we will go more in depth with you and give you some options.
Our agency has a combined 320 years in the insurance industry with an average of 30 years per associate – that’s a world of experience. If you are interested in learning more about becoming a customer of an agency where you are treated as “one of one” instead of “one of several thousand”, contact us at firstname.lastname@example.org. We’re different and that’s our goal.