Transportation Network Companies (Uber and Lyft) and Your Insurance
Transportation Network Companies (TNCs) such as Uber and Lyft are growing exponentially which means more and more people are driving for these companies. Do you drive for them or ride share with them? What auto coverage do you have and more importantly what auto coverage do you not have.
Uber and Lyft are only two of the TNCs or rideshare companies that are now in MA. Others are Safr, Wuleeb and Fasten. Working for these companies is a great way to supplement your income during hours that are convenient for you. Because it is a financial decision, make sure you understand the insurance aspect so you do not lose financially in case of an accident or incident. All TNCs offer some form of insurance, but make sure you understand how that covers, when it covers you and how it works with your personal auto policy.
Don’t hide the fact you are a rideshare driver from your insurance company; instead work with them and your agent to make sure you have what is needed. Many insurance companies have now found a way to work with the TNC coverage by creating rideshare endorsements.
The MA Personal Auto policy has several exclusions that will deny any coverage when a vehicle is used for “public or livery conveyance”. You are making money, so it is therefore considered a business. In the recent past, only a business or commercial livery policy would cover this situation, and if you are not associated with a TNC, it is still the only way to cover any rideshare situation.
The difference with the TNCs is that they will offer insurance. Make sure you take their insurance because you will not find coverage on your personal auto policy while you have a client in the vehicle. The TNC insurance will give you that coverage. All the rideshare companies are different and respond differently, so read your agreement.
The coverage basics are based on what is happening and what insurance you have.
1) When you are driving for your own personal use, your auto policy covers you according to the limits and coverage you have chosen.
2) Once you turn on your TNC application looking for a ridesharer, you are conducting business, so your auto policy will no longer cover you. The ride-share endorsement offered by several companies will cover during this gap period. Each company requirements are different, so find a company that works with your situation. Without this endorsement, you have NO coverage from your Personal Auto policy and NO coverage from the TNC policy.
3) Once a customer touches your doorhandle to get inside your vehicle, you have no coverage under your personal auto policy and no coverage under the ride-share endorsement. You must have the TNC coverage while you have the client in your vehicle. Your TNC coverage may depend on what coverage is available on your personal auto policy. For example if your personal auto policy does not have Collision coverage, they may not extend collision on the TNC policy.
The moral of the story, if you are driving for a ride-share service, make sure you have good coverage on your personal auto policy, take the TNC insurance and purchase the ride-share endorsement on your personal policy.