Uber, Lyft, Etc. – Do I Have Coverage?

phone with interface

We all have apps on your phone for sharing music, movies & games. You can use an app to find a good restaurant or movie show times. Now there are apps for sharing a ride. Names such as Uber or Lyft have become household names. It is their impeccable innovation that puts them at the forefront of it all. There are three major ride-sharing apps out there: Uber, Lyft and Sidecar. Although there are others, these are the major ones. If you’ve not heard of these before, this is how it works: These companies offer a smartphone application which enables drivers to freelance providing rides for a fee. Once you have completed the screening process (which includes providing proof of insurance), you are set up as a driver.

When the driver is “available”, the GPS on their phone identifies their location. When a driver requests a ride through Uber, they match up an available driver and sends them to pick up their rider. Payment (including tip) is arranged through the smartphone application. Much of the cost of the ride goes directly to the driver; cash never changes hands. The rate for the ride can vary based on need. On a busy Friday afternoon, your ride may cost you more than on a Sunday morning.

If you are currently a driver, or an aspiring one, you may be wondering, “Is there coverage on my Personal Auto Policy?”Great question!

If you are considering being a driver for one of these services contact your insurance agent first. Although some argue this is a slightly gray area, the general consensus is that a Personal Auto Policy has an exclusion for this type of activity and there is NO coverage. The exclusion section of most personal auto policies generally reads: For the “insured’s liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance (The transporting of people and/or goods for hire, such as by a taxi service, motor carrier, or a delivery service).” This exclusion does not apply to a share-the-expense car pool.

So what is the difference between a “carpool” or “ride share” and a service like Uber and Lyft? It appears the biggest difference is in a carpool or ride share the driver is sharing the expense with a known individual(s). Operating as an Uber or Lyft driver, you are offering your service to the general public.

Want a quick and fun read? This article provides an interesting interpretation on why Uber drivers need insurance. Check it out at https://www.policygenius.com/blog/insurance-secret-uber-doesnt-want-know/.

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