What ride sharing drivers and passengers need to know about insurance
Most personal auto insurance policies do not provide liability coverage if the vehicle is used as a “public or livery conveyance”.
Another innovation born of mobile technology is the move to a sharing economy. People like to connect, and many like to make extra money by sharing stuff they already own. That’s what ride sharing is all about. It links people who need a ride with car owners who want to use their cars to bring in a little extra cash by chauffeuring strangers around town. It’s a business model that seems to fit in Florida where public transportation is often spotty and hailing a cab is simply not possible on every street corner, as it is in a metro like New York City.
Companies such as Uber and Lyft are launching in Florida, and if you’re interested in being either a driver or passenger, you should know if there are any liability risks associated with ride sharing. No matter if you are behind the steering wheel or in the back seat, talk to your insurance professional to see if the coverage you have is sufficient protection.
For ride sharing drivers, you want to make sure there are no gaps in coverage. It may be that your own insurance offers primary coverage if an accident occurs, and the ride sharing company adds coverage on top of that. Or it may be that the ride sharing company offers coverage from the get-go. An important thing to know is how the coverage works if you are on your way to pick up a passenger and get into an accident. Who pays then?
Here is a VERY important reminder: Most personal auto insurance policies have an exclusion stating that liability coverage will not be provided if the vehicle is used as a “public or livery conveyance” – which is exactly what you’d be doing if you are a ride share driver. The exclusion does not apply if you use your car as a share-the-expense car pool. What’s the difference? One distinction is that the risk of shuttling strangers in a ride share situation is different from a daily commute with friends.
The good news is that insurance companies are starting to offer specialized products to fill any gaps associated with the new ride sharing ventures. And, the best way to know about them is to ask your insurer.
Ride sharing is not the same as taking a traditional taxi, and taxi and limousine drivers are understandably not welcoming of these new companies into what has been traditionally their business. Taxi drivers are licensed by the state, have training requirements and are subject to regulations from local transportation authorities. The ride sharing drivers have none of that. More important, taxis and limos have insurance that protects passengers and others, such as pedestrians that could be involved in an accident.
Passengers who use ride sharing services need to be protected, too. If you own a car, you likely have coverage under your own auto insurance policy. If you don’t own a car, you might consider buying a “non-owner” auto insurance policy. These types of policies provide protection for bodily injury, property damage, medical payments and uninsured/underinsured motorist coverage.
Wishing you safe travels – always!