Ridesharing’s popularity is increasing around the state and the nation, especially in larger cities. The concept of capitalizing on a new “sharing economy” is recently trending. But what are the insurance implications for the passenger as well as the driver? Below are facts to help to shed some light on the issue…
What is Ridesharing?
Ridesharing allows vehicle owners to transport passengers in their own car for a fee or “donation”. Drivers are signed up with a service, or Transportation Network Company (TNC), that connects them to passengers for a fee via a website or smart phone app. The passengers can arrange rides and pay by credit card using the app.
Why is Ridesharing an issue?
Transportation Network Companies such as Uber or Lyft are not subject to the same requirements as taxis or limousines which are licensed by the state or a local authority and subject to strict standards. These standards include vehicle inspection, licensing of drivers, and insurance protection for passengers who could be hurt in an accident. State regulators and legislators warn that the public may not be properly protected when ridesharing.
How is the Ridesharing company insured?
Drivers are using their personal vehicles and personal auto insurance generally excludes coverage when transporting a passenger for a fee. The nature and scope of coverage emerging from providing TNCs varies from company to company, potentially leaving uninsured gaps in coverage.
How do I know if I am covered as a driver?
If you are considering becoming a driver for a TNC you will need to research the company and find out how it protects the driver and passenger, including their liability limits. If you have a personal auto policy you may be able to claim some coverage as a passenger if you are hurt in an accident. If you do not own a car you do not have that option unless you purchased a “named non-owner” policy.