Question:
I am thinking about signing up to be a driver for Uber, Lyft or one of the other rideshare companies. Are there any insurance problems related to providing these services?
Answer:
It’s great you’re looking into this before signing up. There are definitely some issues with your personal auto insurance policy that need to be addressed before you begin providing these services.
Insurance companies, regulators, public officials and insurance professionals have been talking a lot lately about the public policy and insurance implications of so-called ride-sharing services offered by transportation network companies (TNCs), such as Uber, Lyft and Sidecar.
In fact, we believe your current personal auto insurance policy may not provide the protection you need while using your vehicle for ride-sharing services.
Your policy does not provide any coverage while your vehicle is being used to carry persons who are paying for the ride. Some policies exclude coverage while your vehicle “is being used as a public or livery conveyance” and others exclude coverage while it “is being used to carry persons for a fee.” These exclusions apply to all the coverages on your policy — liability, physical damage, medical payments and uninsured motorists — and may apply even while you are just driving around with the TNC app open on your smart-phone, indicating you are available and ready to receive instructions from the TNC.
The Texas Legislature passed a law in 2015 that regulates the insurance issues involved in TNC transactions, including minimum limits of liability. In addition, the law requires the TNC to disclose to you the fact that your personal auto insurance may not provide coverage for TNC activities and to disclose a description of the coverage provided by the TNC.
If you decide to sign up with Uber or another TNC, please contact your agent first so we can discuss these issues together. We can provide a quote for a commercial type of auto insurance policy that will provide the coverage you need – we even have a simple endorsement we can add to some personal auto policies to get you the coverage you need!
This article was prepared and made available to your agent by the Independent Insurance Agents of Texas, which is solely responsible for its content. Please read your insurance policy. If there is any conflict between the information in this article and the actual terms and conditions of your policy, the terms and conditions of your policy will apply. The Independent Insurance Agents of Texas is a non-profit association of more than 1,500 insurance agencies in Texas, dedicated to helping its members succeed, in part by providing technical resources that explain insurance policies sold to their customers.
