Does My Insurance Cover Me If I Drive for Uber or Lyft?
Transportation Network Companies (TNCs) allow drivers to use their personal cars to transport passengers who contact them through an app. (like Lyft and Uber) These apps are gaining in popularity, both for drivers and passengers.
We know of no reason someone should hesitate in booking a ride with one.
However, if you are a driver, or are thinking of becoming one, you should think twice.
Most auto policies contain an exclusion that voids coverage when a vehicle is being used to transport passengers for hire. In addition, most companies would cancel or non-renew a policy if they know a car is being used this way.
A driver’s insurance is void as soon as they’re available for passengers or are en route to pick one up. Uber and other companies have tried to solve this problem by providing minimal liability insurance for their drivers. However, it is usually much less coverage than the driver would have on her own policy. In addition, there is no Uninsured Motorists, Comprehensive, or Collision in force on that vehicle. These coverages are also voided and not provided by the TNC. If you damage your car while the app is open, you are going to have to pay for repairs.
Once a passenger is aboard, the TNCs do provide liability and uninsured motorists insurance up to $1,000,000. In addition, they provide comprehensive and collision (providing the driver has the coverage on their own car insurance policy). Although, the deductibles are much higher than the typical person carries.
The industry is slowly responding, and a few companies offer an endorsement that broadens coverage for the driver. But for now, unless you are willing to pay much higher “taxi” rates, we must recommend our clients avoid using their vehicles in a TNC. There are too many potential financial pitfalls.
Give us a call if you have any questions. (800) 305-9856