Are you missing the ride sharing revolution?
Ride sharing allows passengers to connect with drivers via mobile technology — anytime, anywhere. Consumers download an app to a smart phone, register with an account, request a ride, and pay online. Transportation network companies (TNCs) such as Lyft and Uber are quickly gaining market share in the industry previously dominated by taxi cabs. Using a TNC is simple, convenient and efficient for both riders and drivers. And, drivers have a new, flexible way to earn income. But, along with the rewards of ride sharing come a few risks. Leading the list is lack of complete vehicle insurance coverage. The most significant risk to both riders and drivers is a potential lack of insurance coverage. In the case of an accident between the ride sharing vehicle and a vehicle driven by an uninsured or underinsured motorist, which insurance plan, if any, covers the vehicle, drivers and riders?
Both Uber and Lyft provide up to $1 million in liability protection and other insurance benefits. However, this benefit does not necessarily provide coverage if the vehicle is hit by an uninsured or underinsured driver.
According to the National Association of Insurance Commissioners (NAIC), “the largest known TNCs operating in the U.S. only provide contingent liability coverage. If there is an accident, only third parties are covered for limited damages. Due to coverage gaps with insurance provided by TNCs, you could be left to pay for physical damage to your vehicle and a personal injury in the event of an accident. You could also be on the hook if your vehicle is hit by an uninsured or underinsured driver as TNC insurance does not provide coverage for these situations.”
“The major TNCs provide primary insurance. Uber and Lyft also offer contingent collision and comprehensive coverage while the driver is actively engaged in a ride; the driver has accepted a ride request or has a passenger in the vehicle. Collision and comprehensive coverage is only available for TNC drivers who have elected to purchase coverage on their personal auto insurance.“
In order to help remedy this issue, prior to using ride sharing services, we recommend that consumers (riders) consult with the ride sharing company to ensure that the company verifies the driver’s personal auto insurance coverage, confirms that the company insurance covers the complete trip, and that the company can provide written documentation of liability insurance coverage in case of an accident with an uninsured or underinsured driver.
In order to protect him or herself, the driver should fully understand the insurance policies of the ride share company he or she intends to work with. The individual should check with his or her personal auto insurance to understand the coverage for transportation of rideshare passengers and upgrade or change the policy if necessary. In addition, he or she should ask the following questions about the TNC’s commercial insurance policy.
With these answers in hand, riders and drivers can feel more comfortable using the trendy yet thrifty ride sharing services.
If you know someone working for Uber, Lyft, or another ride sharing service, take a minute to forward this so they can be prepared. If you have a question about an accident involving a ride sharing vehicle, we can help. Goldman & Daszkal, P.A. (954) 428-9333
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