Hypothetically speaking, let's say you have an insured who decides to become a driver for Lyft or Uber. Did you know that they immediately create a coverage gap for themselves the moment they turn their driving app on? The assumption is that the ride-sharing companies will cover the driver for up to $1M should an incident occur. While that is true, as you will see in the illustrations below, there are moments when the driver has limits of just $100,000 - a 90% drop in coverage expected from the Uber or Lyft policy.
For your reference, IIAG has created a resource you can share with your clients should they mention they have started driving for one of these companies. It is recommended that you save this link so you can return to it conveniently.
Insurance Requirements for Ride-Share Drivers
On A Trip
When a driver is on a trip, meaning from the moment a driver physically accepts a request from a rider through the app on their phone to the moment the driver drops the rider off at his or her final destination, liability to third parties is covered by Uber’s $1 million insurance policy. It covers each and every incident that occurs between accepting a trip through the app and reaching the rider’s final destination.
· $1M Liability - Uber’s commercial insurance policy covers drivers’ liability to riders and takes precedence over any personal auto coverage.
· $1M Uninsured/Underinsured Motorist Injury - If another motorist causes the accident but does not have adequate insurance, this policy covers bodily injury of anyone in the rideshare vehicle.
· Contingent Collision and Comprehensive - The driver’s personal collision and/or comprehensive insurance covers physical damage that occurs during a trip.
When a driver is mobile but has not accepted a trip, Uber provides a third party liability policy that meets or exceeds the third party liability insurance requirements of every U.S. state.
· Liability Coverage (In required states such as Georgia): $50,000/$100,000/$25,000 (Bodily injury liability for one person in one accident/bodily injury liability for all persons in one accident/property damage liability for one accident.)
· Covers bodily injury up to $50,000/individual/accident with a total of $100,000/accident and up to $25,000 for property damage
Drivers are required to maintain personal automobile insurance when not working for Uber.
As you can see, there is a gap between when a driver has the app on and when they actually pick up a passenger. There are several companies such as Mercury, State Farm, USAA, Farmers, and Geico, who have created policies that address this need with several more planning to roll out similar products in the future. However, Sen. Harbin is requesting that more agents speak up to their carriers and request that they start offering similar coverages.
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