Why Is Uber Insurance Still Uber Complicated?

January 30, 2017
Written by C&S Insurance

uber insuranceWe get a lot of calls about “Uber insurance,” or the kind of car insurance that Uber drivers should purchase. With so many Uber and Lyft drivers (thousands of them, according to some estimates), now offering transportation throughout Massachusetts, this is an important question—with a complex answer. In the following paragraphs we’ll review six of today’s most common Uber insurance FAQs:

Will my personal auto insurance cover me and my passengers in the event of an accident?

No. Unless you have specifically purchased a ride-hailing endorsement from your carrier, most personal auto policies will not cover claims that arise from Uber or Lyft drives. What’s more, if you haven’t informed your carrier that you are working for a ride-hailing company, your MA car insurance policy could be canceled. (According to the Boston Globe, Massachusetts law does not prohibit insurance companies from dropping drivers who work for companies like Lyft or Uber.) However, in recent months several major carriers have taken steps to help their regular auto insurance customers add coverage for ride-hailing gigs. Plymouth Rock calls the coverage a “TNC endorsement;” TNC stands for transportation network company. MAPFRE and USAA also provide TNC endorsements that fill the gap between coverage the rideshare companies provide and coverage drivers already have on the personal auto policies.

Will Uber’s insurance cover me as an employee of the company?

According to 2017 reports, Uber’s coverage stands at $1 million in liability coverage per incident and $1 million in uninsured/underinsured motorist coverage per incident. Lyft’s coverage also includes $1 million in liability per incident and $1 million in uninsured/underinsured motorist per incident. But these coverage amounts are lower (or nonexistent) for drivers who do not have a customer in the car. If an accident occurs while your ride-hailing app is turned on, but you haven’t yet accepted the fare or picked up the passenger, you may be out of luck. This is why it makes sense to look into a ride-hailing or TNC endorsement. Contact your Massachusetts insurance agency for personalized advice.

Should I purchase “rideshare insurance” coverage?

Probably. The good news is, your options for this added type of coverage are growing. In the past, insurance companies may have recommended purchasing commercial auto insurance for ride-hailing work. Now, several companies offer reasonably priced endorsements that can be added to your personal auto insurance for a lot less money. According to the Globe, the typical cost is an additional $100 per year, on top of your current premium.

Do I need commercial auto insurance in order to work as an Uber or Lyft driver?

Probably not. Commercial auto insurance comes with higher liability limits…and a much higher price tag. Industry experts say the average cost of commercial car insurance ranges between $1,200 and $2,400 per year. This used to be the only option to fill ride-hailing coverage gaps in Massachusetts. Luckily, that is changing.

Do I need rideshare insurance or commercial insurance for my neighborhood carpool?

No, you do not need ridesharing insurance for the use of your car in a standard carpool for commuters, parents, or volunteers. In other words, you’re in the clear to drive your children’s classmates to sports practice, or to offer rides on behalf of the local senior center.

Will my insurance cover me for non-collision issues (e.g. passenger damage to my car, lost or stolen property, or allegations of harassment)?

As Christopher Tidball writes in PropertyCasualty360, “there are three key elements in every claim: coverage, liability and damages. Without coverage, the other two simply don’t matter.” If you’re driving for Uber or Lyft, your first step should be securing the proper coverage for the work you are performing. This means calling your insurance agency, and getting your questions answered firsthand. On that note, we’re always here to help. Reach us at 508.339.2951.