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