A lot has changed in the past couple years since we first wrote about ridesharing (the service where you obtain a ride through a smartphone app for a fee). There are several transportation network companies (TNC’s) who provide this service; however, Uber and Lyft are still the most recognized. With time, usage has increased in urban areas and especially with people aged 18-29. Our main concern? The changes insurance companies have made. As the needs of society advance through technology, insurance companies have to fight to meet demands for coverages and stay competitive. The agents at Kasmann Insurance want to educate you on the gaps in coverage when you contract with a transportation network company, and what insurance companies are doing about it.
| Rideshare Timeline | Transportation Network Company (TNC) Insurance? | Personal Auto Insurance? |
|---|---|---|
| Phase 0 App is off, vehicle is being driven for personal use only |
No - Your personal auto insurance applies. This is regular personal use. | Yes |
| Phase 1 App is on, driver is waiting on a request |
Yes - Uber & Lyft provide contingent liability 50/100/25. NO Uninsured/Underinsured Motorist coverages or Physical Damage to your vehicle |
Only with Transportation Network Company endorsement |
| Phase 2 Driver accepts request, drives to pick up passenger |
Yes - Uber & Lyft provide $1 million liability $1 million Uninsured/Underinsured Motorist liability Comprehensive/Collision: $1,000 deductible |
Only with Transportation Network Company endorsement |
| Phase 3 Passenger is picked up and in the vehicle |
Yes - Uber & Lyft provide $1 million liability $1 million Uninsured/Underinsured Motorist liability Comprehensive/Collision: $1,000 deductible |
Only with Transportation Network Company endorsement |
Ridesharing Coverage
The concern with driving your personal vehicle for a rideshare service is that your personal auto insurance coverage specifically excludes any type of livery, or vehicles for hire. When we first reported on this topic, insurance companies in Missouri were not offering personal auto insurance coverage for ridesharing, and costly commercial auto coverage was the only option. Since then, many companies have taken necessary steps to allow an endorsement to the personal auto policy that fills in some gaps in coverage from the TNC.
What Are Insurance Companies Offering?
Rideshare coverage on personal auto policies is now available in Missouri; however, some companies are choosing not to offer it, while others don’t offer it for full-time drivers. Of the insurance companies that do provide a rideshare coverage option, some charge a set dollar amount for the endorsement, while others charge a percentage that could be determined by other factors, such as miles driven. While we are contracted with several auto insurance companies, the only two that are providing coverage for ridesharing are Auto-Owners and Progressive. At this time, none of our other carriers are offering TNC coverage through an endorsement, but that could certainly change.
Auto-Owners: Limited Transportation Network Company Driver Coverage is designed to fill in the potential coverage gaps if you are driving for Uber, Lyft, etc. During Phase 1 (app is on, waiting on a request), this endorsement would remove the current policy exclusions and the liability limit listed on your auto insurance policy declarations page would be in excess of the 50,000/100,000/25,000 liability provided by the TNC. Any physical damage coverage and deductibles listed on your auto policy would also extend. During Phases 2 and 3, your physical damage coverage and deductibles are in excess of what is provided by the TNC, so if the deductibles listed on your auto policy are less than the $1000 deductible mandated by the TNC’s, Auto-Owners will pay the difference between your deductible and the $1000.
Progressive: Transportation Network Company Coverage also fills in most coverage gaps between the personal auto policy and the TNC’s policy. It requires minimum liability limits of 50,000/100,000/25,000 on the Progressive auto policy. This endorsement even applies to Phase 1 – where the app is turned on and the driver is waiting to accept a request for a ride. Uninsured and underinsured motorist, as well as medical payments coverage also extend to the driver. Any physical damage coverage on the Progressive auto policy would be in excess of the TNC’s coverage ($1000 deductible), so if you were at-fault in a collision your auto policy had a $500 collision deductible, you would pay the first $500, Progressive would pay the remaining $500 to Uber, and Uber would pay the balance to fix your vehicle’s damage. An added benefit with Progressive, is that “coverage is extended during all rideshare activity including when the driver is traveling to meet a rider, pick up a package, or has the rider/package in the vehicle.” The importance of “package” in Progressive’s definition means that they will also cover “Uber Eats” food delivery drivers under this endorsement.
Insure with People You Trust
The Kasmann Insurance Agency is in business to serve and educate our customers and community. We do not want anyone to be caught in a situation where they thought they had coverage, but were unaware of coverages exclusions. Insurance is never an “it’s better to ask for forgiveness than permission” situation. If you are driving for Uber, Lyft, or any other rideshare service, please contact us immediately to let us know. We will help you fill in the gaps in your auto insurance coverage so you are protected, no matter what the phase may be.