Happy March, everyone!
With the madness of March comes the big tournament and a lot of people making their way to the bar with friends to watch the games. If you’re anything like me, the first thing that comes to mind when I think about this scenario is safety – how can everyone get home safely? Rideshare programs like UBER and LYFT have skyrocketed all over the country, promoting alternative modes of transportation to the traditional taxi and public transit. UBER and LYFT’s business model derives from utilizing everyday drivers and their own vehicles to taxi around their customers, much like the ones that will be at the bars watching the tournament this month.
Both companies also attract drivers by showing an easy and efficient way to add a few extra bucks to your pocket. It all seems simple enough on the surface, but you have to pay attention to the details of when and for what you are covered for, and how they affect your liability exposure. If you are a driver for one of these services or are considering it, be aware that there are basically four phases of liability that you and your car can be in:
1. App turned off
Pretty straight forward – if the app is off, you are off-duty, meaning you are driving for personal use – here your personal auto insurance takes care of the exposure.
2. Passenger accepted and en route to pick up.
You’ve received a ride request and you are on the way to pick them up, which means you are on the clock and working! Coverage is then provided by transportation network. Most rideshares typically cover up to $1,000,000 liability and up to $50,000 physical damage for the vehicle.
3. A passenger is aboard.
Much like stage two, you are on the clock and working. Transportation network usually covers $1,000,000 liability and $50K/accident for the vehicle.
4. Available with app on and no arranged passengers.
The trickiest of the four phases, most personal auto policies have exclusions for livery, which means they don’t consider the use of your personal vehicle as a taxi. So, when the app is turned on, your auto coverage is essentially “turned-off.” Also, at the time, the rideshare networks only provide liability of $50,000 per person, $100,000 per accident and $25,000 for property damage with no coverage for your vehicle in this phase. That means during this period, you are NOT fully covered.
We are seeing a lot of our carriers crafting language that clearly spells out when the coverage applies and when it does not. Some are also providing an endorsement for a fee that will pick up the exposure when you have an application on and no ride arranged. The endorsements will provide coverage at your current policy limit to cover the exposure while the app is on and you have not arranged a passenger. Getting an endorsement is critical to cover yourself properly.
If you are driving for UBER, LYFT or another ride-share service, make sure that you contact your agent to confirm that you have adequate coverage. The extra money is always nice, but you need to address the risks associated with driving for these companies and make sure your coverage is tailored to sufficiently address the liability and physical damage for your vehicle. We can provide you with a quick review and set up your policy to cover this correctly.
As always, thanks for your continued support and allowing us to protect your families.