My first rideshare experience
It was September 29, 2013 when I first saw large furry pink moustaches attached to cars around the Hollywood Bowl. While enjoying a picnic before the concert, I would keep hearing Vampire Weekend blaring from cars and look up to see riders cheerfully hop out of these pink moustached cars. A quick Google search sent me to Lyft, a ridesharing service.
The yellow cab days were over after my first ridesharing experience. I downloaded the app, entered some information, and a car arrived within five minutes. No more hailing a taxi or calling a toll free number. The app had everything I needed to know from the estimated cost of the ride to who was behind the wheel.
Who knew this app-driven share economy would disrupt the transportation industry and how we travel?
But what about the insurance?
At the time I was comforted in knowing Uber and Lyft screened their drivers by hiring experienced drivers with clear driving records and asked them to pass a background check. The cars were also inspected but what about the insurance?
Uber, Lyft and other ridesharing companies often boast their drivers are fully insured but are they? The answer is maybe.
All drivers should check with their personal auto insurance policy to see if they are insured while driving for this service. If they did, they would quickly learn most insurance policies have a livery exclusion. This excludes coverage when the driver carries a passenger for a fee. Although this exclusion already exists, some insurers have additional verbiage specifically excluding ridesharing on the auto policy.
If you plan on becoming a driver, many insurers offer rideshare insurance by endorsement. If it isn’t available with your insurer, you may consider a commercial auto policy. Failing to notify your insurer of the ridesharing gig may deny coverage for a claim and non-renew or cancel your auto policy.
As a driver when I am insured with the mandated insurance from my ridesharing company?
The insurance you have through Uber, Lyft or other ridesharing company is often minimal while the app is on and you are waiting for a rider. The advertised company insurance acts once you have accepted a ride request.
Let’s have a look at what that means for a driver and rider!
| Condition | Are you covered? |
|
When the app is off |
Yes – Your personal insurance covers you |
|
When the App is on and you are waiting for a ride request |
No – Your personal insurance policy doesn’t cover this period without a ridesharing endorsement. |
|
You accepted a ride request via the App |
Yes – Rideshare company policy acts – potentially with a higher deductible |
|
When you have a passenger from the rideshare App |
Yes – Rideshare company policy acts – potentially with a higher deductible |
Deductible
Another reason to add the ridesharing endorsement is because of comprehensive and collision deductibles through ridesharing companies are often higher than current deductibles on your personal insurance policy. The no coverage area in the table is most concerning since liability coverage from ridesharing companies is typically only $50,000 per person up to $100,000 per accident with $25,000 for property damage.
Much consideration
Ridesharing was created as a side-job to supplement income. Many drivers are dedicating 70-80 hours a week and driving full-time. You might consider thoroughly calculating earnings after taxes, the diminishing value of the car, gas, maintenance, and extra costs to determine if this is the right decision for you.
Insurance is based on risk
Being on the road more increases the risks associated with driving and increases insurance costs due to annual mileage and additional endorsements. Your insurance advisor can guide you before deciding on signing up as a driver.
Milestone Risk Management is not affiliated with any ridesharing company or entity. You should always check with your insurance agent/company to ensure you have the correct coverage for your needs.
Milestone Risk Management specialize in personal and commercial insurance. Contact us today for your free total assessment.
