Whether you are a rider/passenger or a driver for any ridesharing program it’s good to know where you stand on the car insurance side of things. Bad things can happen to good and well-intentioned people. These programs are handy and popular but there can be a darker side to all the good.
Found on Facebook:
“Customer of mine was driving for xxxxx and got into an accident. She called me up wondering why she didn’t have coverage because she thought she had “full coverage”. I told her that her personal auto policy did not cover her for livery services and passenger pick up. She said she thought she told me she was doing this when she purchased the policy. I advised her that she did not tell me this and that her carrier does not even provide this type of coverage…. She had four people in the vehicle and now she’s trying to find out who is going to pay for the damages on her vehicle as well as the four passengers who suffered injuries…. She even went so far as to tell me that she sent a copy of her personal auto policy to xxxxx and they approved her to drive so she thought she had coverage.”
No one set out to do anything wrong. No one set out to get hurt. The term, "It's all fun and games until someone loses an eye" is claimed to be from ancient Rome where the only rule during wrestling matches was no eye gouging. The same applies here…it’s all great till an accident happens.
So, whose auto insurance is protecting the ride-sharing vehicle?
A personal car insurance policy doesn’t cover commercial use of vehicles. Driving people around for hire is a commercial use. The ride-sharing companies do provide some insurance, typically supplemental, limited liability once passengers set foot in the vehicle and sometimes for when the app is turned on/connected to the internet. Ride-share companies are updating their policies so the best thing to do is make sure you understand when you’re covered by whom. Check for a written statement to keep in your files. In the past it's been maintained that all drivers are independent contractors, not employees; therefore, (the argument goes) the company is not responsible for the driver’s distractions so their insurance might not apply.
To make sure you are covered as a driver on your policy, you must make your auto insurance company aware that you’re a ride-share driver and get their Ride-Share Endorsement. This is optional coverage you would add as a “rider” to your policy (a rider is a provision of an insurance policy that adds to or amends the coverage or terms). Some car insurance companies absolutely do not want to offer this coverage, but some do. Some charge more than others. It varies by state and locale so it’s a good idea to shop the rates if your carrier will not cover ride-sharing. If they will not cover ride-sharing and you’re doing it anyway, it can all come back on you.
Ride-sharing can be a great thing! Convenience. Quick service. Easy to use apps. As with anything, however, know what you’re getting into. This goes for the passengers too. Factor the risks in with the benefits as you get into a car.
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