According to the Uber app, they are available in 548 cities and have made a billion made plus connections worldwide. Likewise, Lyft now holds 25% of the rideshare market. As time goes on, many are making the choice to ditch their personal vehicle.
To me, that presents a real chance that I am talking to an insured who is rideshare
provider at least four times a day. I must ask are they covered properly?
Ridesharing has been around for a long time. Rideshare insurance is new. No one ever questioned it before since it was free. For instance, the Park and Ride was never questioned. These consisted of an out of the way parking lot where you could meet, park, and ride together to work or school.
We also have the HOV lane. You can probably still find these in various places. I know I still see them in the Washington, New Jersey, and New York area. In order to ride in these lanes, you have to have more than one person in your car. Of course, enter the passenger seat dummies for the carpool lane. 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), Farmers and Erie getting approval for various states. Other carriers like Progressive, Allstate, and Geico are still referring clients to commercial insurance or issuing a denial until they are approved in certain states.
What is ridesharing and what does it require? The application provided by Lyft and Uber is only available as a phone app. It tracks and tasks active rideshare operators. Both programs have many different types of vehicles and services. There is no limit set as to the number of passengers who rideshare.
The coverage that is widely offered through a personal auto policy is optional coverage. It’s going to add a minimum of $100 in premium onto the existing policy. The coverage is split as detailed below in this graphic provided by Farmers Insurance:
Farmers Insurance NJ
Other factors the carrier is going to consider will be 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 $1000 a month, but once the claim happens and they are denied, they can kiss those earnings good-byes.
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