As ride-sharing applications become more and more popular, more drivers are beginning to work for them as well. Yet, most drivers knows little about the insurance information for driving ride-share companies before it’s too late.
The Insurance Gap
Many of ride share drivers do not know what their auto insurance truly covers. Many also does not realize working for a ride share company may jeopardize your own personal auto insurance policy, as it is consider driving an auto commercially and often violates traditional personal auto insurance policies. There is also the matter of the insurance gap, which is the period from a driver turns on a ride-share application to accepting a pickup request. This is considered a gray area as ride-share companies only offers insurance coverage when a passenger is in the car with the driver in the past.
An important thing to note is that the coverage offered by Lyft and Uber during the insurance gap period is a contingent coverage policy. Which means drivers must file a claim with their personal insurance company first. If the company choose to deny the claim, only then will Lyft or Uber accept claims from the driver. There are also several key areas of coverage missing from the contingent policy. The missing areas are medical coverage, collision coverage or comprehensive coverage and rental vehicle. Collision/comprehensive coverage and the availability of rental vehicle is important as the drivers are not able to drive for Lyft or Uber while their car is in the shop.
More and more insurance companies are coming out with new hybrid auto insurance coverage designed for ride share drivers. A new policy means that drivers would not be drop by driving for a ride share companies. It will also help drivers as they wouldn’t be pressured to lie about their work. As drivers realizes that they may be dropped from their insurance company once they notified them when an accident occur. These coverage although more expensive than personal coverage is significantly less costly than a typical commercial driver’s insurance policy.