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For those of you over 30, you probably remember a time when there was a stigma around meeting people “from the Internet.”  You were probably also taught as a child to never get into cars with strangers.  Fast forward to 2017 – a time full of technology, smart phones, apps, and ridesharing.  Ridesharing is literally summonsing a stranger from the Internet for a ride in their car.  Doesn’t that seem a little ironic?

A lot of people are signing up to offer rides through services such as Uber, or Lyft, as a way to make extra cash.  The latest statistics from J.D. Power & Associates state that 1 in 4 American use rideshare.  The agents at Kasmann Insurance want to make sure you know exactly what you’re getting into in regards to your insurance coverage when you are contracted with a ridesharing program.

 

Personal Auto Exclusions

When you sign up to drive for Uber or Lyft, your contract may state something similar to the following: “Your personal insurance may cover you in certain situations. Please check your personal policy coverage for more information.” While a few insurance companies in certain states do have the ability to endorse coverage for ridesharing programs, we have yet to see an adaptation to coverage by companies writing in Missouri.  As it currently stands, a standard auto insurance policy in our state specifically excludes any type of livery, or vehicles for hire. In simpler terms, you do not have any coverage under your personal auto policy for ridesharing endeavors.

 

Ridesharing is typically looked at in three phases:

Phase 1 – The Uber or Lyft driver opens the app for business

Phase 2 – Driver accepts a job and drives to pick customer up

Phase 3 – The customer is picked up and is in the car

Because there can be some confusion as to how the driver is covered during the different phases, we have created a chart to help you:

 

Rideshare Coverage vs. Personal Insurance

Rideshare TimelineRideshare Insurance?Personal Auto Insurance?
Offline – App is off, vehicle is being driven for personal use onlyNoYes
Phase 1 Online/App is on, driver is available for hireYes – contingent liability 50/100/25No
Phase 2 Driver accepts bid, driving to pick up passengerYes - $1 million liability
$1 million uninsured liability
Comprehensive/Collision: contingent coverage, deductibles range from $1000-$2500
No
Phase 3 Passenger is in the vehicleYes - $1 million liability
$1 million uninsured liability
Comprehensive/Collision: contingent coverage, deductibles range from $1000-$2500
No
Passenger exits vehicleYes – contingent liability 50/100/25No

After examining the low limits of liability provided during Phase 1, and the high deductibles associated with Phases 2 and 3, a conscientious rideshare driver may determine they need more coverage.  Since personal auto insurance in Missouri excludes coverage for vehicle sharing programs, you will find that you will need to supplement your personal auto policy with commercial auto insurance.  Making quick cash for giving folks rides may not be quite enough for a lot of drivers to justify the cost of commercial auto insurance.

 

Insure with the People You Trust

The Kasmann Insurance Agency is in business to serve and educate our customers.   We do not want anyone to be caught in a situation where they thought they had coverage, but were unaware of coverages exclusions.  Even though it may seem strange to get into a car with a stranger “from the internet”, it seems like an increasingly common occurrence. The money a driver can make with ridesharing programs may entice someone to get into exactly the aforementioned situation.  It is always best to be upfront with your insurance agent and ask first, rather than have regrets later.  If you are driving for Uber or Lyft, please contact us to help you determine where your personal coverage lacks and what type of commercial insurance we can offer to cover those gaps.