Ride-sharing companies have taken the world by storm! It is difficult to visit any US city (or any big international city) without seeing the vehicles with the Uber and Lyft signs posted in the back window. If you drive for a Transportation Network Company (commonly known as a “TNC”) such as Uber or Lyft, you may think your personal automobile insurance policy covers you and your vehicle. However, this may not be the case. Be aware of the insurance implications of driving in your personal vehicle for a TNC!
Many drivers are environmentally conscious and regularly share rides with friends, or carpool with coworkers. This kind of ride-sharing is typically covered by your personal automobile insurance policy, as it is not for any economic benefit.
However, if you are picking up and transporting passengers for a fee, this activity is considered ride-sharing within the meaning of operating your vehicle on behalf of a transportation network company. This is a business purpose, so your personal insurance policy likely does not cover you!
Personal Automobile Coverage
Most personal automobile insurance policies exclude coverage when the insured is using the vehicle for business purposes. Ride-sharing apps are considered just this – you are transporting persons (you usually do not know) for payment or a fee. As such, if there is an accident that involves the vehicle while the TNC activity is occurring, it is likely that your personal automobile policy will not cover the damage and/or injuries.
Ride-Sharing Companies’ Insurance
Transportation Network Companies are required by law to provide insurance to their drivers. However, the coverage varies based on the period of time in relation to the passenger, and the TNC’s coverage does not always provide the same level of coverage.
For instance, the coverage provided while a passenger is in your vehicle is different than the coverage provided when driving to pick up a passenger (with no passenger in the vehicle). At these different stages, you have varied levels of coverage (or even no coverage!) from your ride-share company.
If you drive for a TNC, you may want to look into your insurance options to ensure protection for yourself and your vehicle. Talk to your insurance agent about the different forms of coverage your insurer offers.
If you were involved in an incident while operating your vehicle for a TNC, contact Farmer Curtis LLP for assistance with any questions or issues!