Rideshare Coverage

According to the Uber app, their service is available in 548 cities and has made a billion plus connections worldwide.  At the New Year, some insureds may be thinking for taking this up to pay off holiday bills.  To me, that presents a real chance that I am talking to an insured who drives for Uber.  I wonder are they covered properly?

A close-up of uber car service on 5th Ave in NYC, USA

Although, ridesharing has been around for a long time, rideshare insurance is new.  No one ever questioned it before.  Do you remember Park and Ride?  These consisted of an out of the way parking lot where you could meet, park, and ride together to work or school.   You would often see signs on the road indicating their location and warnings about parking there if Park and Ride was not your intention.

We also had the HOV lane.  You can probably still find those in various places.  I know I still see them in the Washington DC area.  In order to ride in these lanes, you have to have more than one person in your car.  Either way, it was free.

But once we enter the money for service aspect then liability becomes an issue.  The majority of carriers offer the ridesharing coverage.  You may recall USAA, CSAA (AAA), State Farm and Erie getting approval for various states.

So, if that’s what ridesharing really is, what does it require?

Well, this is an optional coverage.  It is not automatic.  These carriers want the insured to have a conversation before they add it.  Unlike the liability limits, it’s per vehicle, not per policy.

There is no limit set as to the number of passengers who rideshare.  One assumes one or two.  However, carriers my exclude conveyances like motor homes, buses, vans, pickup trucks with trailers or shells, and campers.

They want to know who the drivers are going to be in the household.  Do they have a good motor vehicle record?  In states like California – that wants the companies to assign drivers to vehicles – that can be crucial. If you want to place rideshare coverage on the vehicle that driver number four, who is one step from suspension, is assigned to – problems may arise.

The carrier may also require full coverage on the vehicle.   There will be no getting away with liability only if you want rideshare coverage.   And they may ask you to lower the limits.  If the insured has an umbrella in place, this may cause an issue.

It may not be available in all states, so check with the carrier and make sure it can be added on.  Of course, if the insured wants to become a driver for hire full time, it would be best to outfit them with a commercial auto policy instead.  It’s a more costly option, but as we know the more the exposure, the more the cost.

Besides, those drivers for hire may be making $800 a month, but once the claim happens and they are denied, they can kiss those earning good-bye.

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