Ride Sharing Insurance Gaps
Uber, Lyft and Sidecar are personal taxi services that are becoming increasingly popular in many of the nation’s big cities. They can provide the utmost convenience for those looking to get safe and timely rides to and from work, home, restaurants, etc. especially utilizing today’s cell phone with the simple click of a button. However, these convenience-boosters have created a new problem for the emerging industry, individual drivers, insurance carriers and ride customers – known as “ride sharing insurance gaps”.
Since there are three phases of the Uber/Lyft /Sidecar process, there are gaps in insurance coverage that regular taxi companies do not experience.
Phase one of the Uber/Lyft process involves driving around waiting for a customer to request a ride. Phase two is when the driver is in route to pick up their customer. Phase three is the final phase of driving the customer to their destination. Phase one might be covered by the driver’s personal auto insurance policy depending on their carrier. Personal auto insurance policies usually refuse to cover “for hire” driving. Phase three could be covered by a commercial auto insurance policy if they have this type of policy in force or the company (Lyft, Uber or Sidecar) offers it to their drivers. The major gap in coverage lies in the second phase of the transportation when the driver has been called and is in route to their customer.
As a new industry, it will take time for the insurance world to figure out product coverages for the individual drivers and the companies. In the meantime, both riders and drivers could be at risk – who would be responsible if there is an accident for physical damage to the personal auto or medical expenses to a customer passenger?
Contact Randy Jones Insurance Services in Pleasanton for all of your California personal and commercial auto insurance needs.