Hey Lyft, Sidecar, and uberX Drivers… You Might Want to Double-Check Your Insurance

Auto insurance ride-share exclusion

“Ride-share” drivers may want to check their insurance policies for updated exclusions like this.

One of the big debates in the battle over how to regulate Transportation Network Companies (TNCs) like Lyft, Sidecar, and uberX is over how to ensure adequate insurance. The Seattle City Council seemed pretty adamant about requiring insurance comparable to the commercial insurance required of taxi drivers, while the TNCs basically argued: “Don’t worry, we’re handling it, trust us.” Particularly offensive to the TNCs is a provision that requires that their blanket insurance cover drivers whenever they are logged into the system, not just when they are engaged with a passenger.

Good thing too, because insurance companies are busy updating their personal auto insurance policies to explicitly exclude coverage when the vehicle is used in connection with TNC services, for example, in the revision above that Amica has sent to customers:

We have excluded Medical Payments Coverage for bodily injury sustained by anyone other than you or any family member while occupying, or when struck by, your covered auto while it is enrolled in a personal vehicle sharing program under the terms of a written agreement and being used in connection with such program.

What exactly does this language mean? I’m not sure. But I wouldn’t count on my insurance company paying a claim on an incident that occurred while I was logged into a TNC. Or, perhaps, ever.

TNC boosters seem to think that because there’s an app, it changes everything! It doesn’t. Your personal auto insurance does not cover commercial for-hire use. So I’d make damn sure the TNC’s insurance does before assuming the liability that comes with being a for-hire driver.

Comments

  1. 1

    Lack Thereof spews:

    What it means is that they will not cover any personal injuries to passengers in your car, or any in any cars you hit, if you are signed up for uberX etc.

    Does not seem to effect your property damage coverage, though, or your personal injury coverage, or your family’s personal injury coverage.

    The “rideshare” companies and their apps have proven that there is a demand for for-hire cars far beyond what the City Council’s current system allows. We need to drop the for-hire caps, and make it easy for Lyft, uberX et al to get their drivers & vehicles for-hire licensed.

  2. 2

    czechsaaz spews:

    We need to drop the for-hire caps, and make it easy for Lyft, uberX et al to get their drivers & vehicles for-hire licensed.

  3. 3

    Better spews:

    “The “rideshare” companies and their apps have proven that there is a demand for for-hire cars far beyond what the City Council’s current system allows.”
    There may be a reason for that too.
    Wasn’t it posted that unlimited cars were tried in the 90s and it had the opposite results expected?
    If that was true, could someone re post link?

  4. 4

    czechsaaz spews:

    The “rideshare” companies and their apps have proven that there is a demand for for-hire cars far beyond what the City Council’s current system allows. We need to drop the for-hire caps, and make it easy for Lyft, uberX et al to get their drivers & vehicles for-hire licensed

    Phillip Morris proved there’s a market for tobacco so we should lift he restrictions and let them sell it however they want.

    Phillip Hoffman proved there’s a market for heroin so we need to let people sell it.

    Maybe having under insured drivers illegally acting as for-hire livery services in uninspected private vehicles, while convenient for the consumer, is not such a great idea. Maybe making ride-shares abide by the safety standards of Taxis is the cost of doing business in a responsible manner.

  5. 5

    phil spews:

    Probably safer to use a fully insured company like Eastside/Flate Rate for Hire via the TaxiMagic app. Rather than hoping your ride has insurance.

  6. 6

    don spews:

    There was a case recently in SF where an Uber driver struck and killed a 6 year old girl. The company policy doesn’t cover drivers unless a passenger is in the car. The driver was between rides and his insurance company won’t pay since his policy doesn’t cover commercial vehicles. This is what the City Council is trying to prevent.

    http://www.sfgate.com/bayarea/.....183379.php

  7. 7

    N in Seattle spews:

    @1:

    I suggest you read the actual document rather than the excerpt on Medical Payments that Goldy blockquoted in the post. That was merely Part B of the exclusion.

    Parts A, C, and D created similar exclusions for, respectively, Liability, Uninsured Motorists, and Damage to your Auto. There’s also an endorsement that excludes Underinsured Motorist coverage when you’re engaged in TNC activities.

  8. 9

    Lack Thereof spews:

    @2: We experimented with de-regulation of hailable taxicabs, both rates and number of cars. It did go terribly. Street-hailed taxis need to have a regulated, standardized rate, because you can’t “shop around” for a cab when you’re standing on a random corner flagging down whatever taxi drives by. And then you need to limit the number of cars to ensure that the cab companies have enough business to remain profitable at the government regulated rate.

    However, we’re talking about for-hire dispatched cars here. They’re a completely different animal, with a different market and a different license. People comparison shop for for-hire cars, pick their favorite outfits, and compare prices – something that’s impossible for street-hails. In the 90′s for-hire was a tiny little market compared to taxicabs- it’s only since smartphone dispatch apps have come on the scene that the latent demand for for-hire cars is showing up.

    @3: If we get them into the for-hire regulatory system, as I advocate, they won’t be under-insured, or acting illegally. But the city council seems to have no interest in easing the hurdles to getting people for-hire licensed or expanding the number of for-hire licenses.

    @4: All the “rideshare” outfits have insurance that covers you while you’re in the car. It’s when the car is deadheading or off duty that there may be liability issues.

    @6: He quoted a section and asked what it meant. Didn’t ask about the rest.

  9. 10

    ArtFart spews:

    There’s a demand for murder for hire, too (and there probably is an “app” for it) but it’s not such a hot idea for city to just step aside and let “entrepreneurs” fill it.

  10. 11

    Sarah90 spews:

    It means that only the named insured and their family members will be covered (for anything) in any accident in which the named insured is providing ridehare services. That precludes non-family passengers and anyone in any other vehicle or vehicles involved in the accident from being covered by the named insured’s policy.

  11. 13

    InsuranceGuy spews:

    The author of this article should check do a little more careful research.

    This exclusion has to do with vehicle sharing (e.g. RelayRides) and not with ride sharing. This means if you let someone other than a family member (defined more clearly in other pages of ISO’s policy form) drive your car, then the insurance would not cover.

    The reason is insurance companies will underwrite your family when producing a rate. They do not contemplate others using your car, other than perhaps incidentally.

    The portion of ride-sharing with a customer in the vehicle is already excluded in the ‘exclusion section’ of standard insurance forms with the language ‘livery’ or ‘while providing transportation for commission or a fee’, with an exclusion to that exclusion being share-the-cost carpools. Such language has existed in standard auto policies for a few decades already.

    The question is what happens to a ride-sharing vehicle when there is no customer in the car…

  12. 14

    Lack Thereof spews:

    Alternately, you could do what pizza delivery drivers have done for ages: simply lie to your insurance company. Its easier than paying 3x as much for a commercial policy.

  13. 15

    djw spews:

    TNC boosters seem to think that because there’s an app, it changes everything! It doesn’t.

    In every blog post and conversation I had about this at the Stranger and STB, the consensus view was that the council was right to insist on stronger insurance regs. I certainly think so. The complaint was against the caps. This “seems like” a deliberate mischaracterization of the position of those who disagree with you on this issue.

  14. 16

    ClaimsAdjuster spews:

    @15. Not really. Uber/Lyft/Sidecar are collecting signatures for a referendum to overturn the entire law on TNCs, not just the cap. They continue to operate now with the driver’s invalid non-commercial policy as the primary. They will continue to do so outside of Seattle when the law goes into effect. They do not want any regulation at all but yap on the cap as if that were the entire legislation.