Ridesharing companies use mobile apps to connect
passengers with drivers using their personal cars to compete with taxi cab
companies. These companies have begun negotiations with the city to offer
their services in Pittsburgh. Uber and Lfyt are two of the more popular
ones on the road thus far and both have launced their respective services just
recently. It turns out those mustaches on the front bumpers of cars
around the area are more than just a fad gone wrong.
Unfortunately, the way that personal auto insurance
policies are currently written, coverage may be voided for most of the drivers
hired by theses services. Following is the exclusion found in most
personal automobile insurance policies:
Any insured's liability arising out of the
ownership or operation of a vehicle while it is being used as public or livery
conveyance. This exclusion (A.5.) does not apply to a share-the-expense
car pool.
For a ridesharing driver to be covered properly, a
commercial auto policy would need to be purchased due to the large liability
exposure. Please note that a commercial policy would be extremely
expensive and not readily available in Pittsburgh's insurance marketplace.
Most major ridesharing services carry their own
commercial auto insurance which offers limited liability coverage to
passengers, other vehicles & pedestrians. The ridesharing company's
policy is intended to respond when drivers are en route to pick up a
ridesharing client or have one in the car. This policy would not cover the
drivers when they are in between fares. It is not clear if the
ridesharing company's policy would cover damage to one of their driver's
cars. Potentially, there could be a lot of uninsured drivers on the
road. Even if you don't use one of these services you might want to call
our office and check on your un and underinsured limits in the case you get
into an accident with a ride sharing vehicle.
Until personal automobile insurance carriers begin
to offer policies that address new exposures such as ridesharing, be extremely
guarded when considering ridesharing as an occupation. This may not be a
good way to earn a second income. Pizza delivery drivers face a similar
issue. There is a hidden exclusion in a delivery person’s personal auto
insurance policy that states, "all coverage is excluded for any insured
using vehicle while employed in the pickup or delivery of newspapers or
magazines, food or any products for the purpose of compensation". At
a time of loss an insurance adjuster has the ability to deny coverage due to
this exclusion in the policy. The same type of thing could be a possibility for
ride sharing drivers so you want to check with your auto insurance carrier
and the company you are thinking of being a part of before becoming a
driver.
As this is an ever changing new marketplace its best
to keep up to date on how these companies are covered and know what risks you
might be taking as an individual by being a passenger or a driver. It's
an exciting service that brings what seems to be a need for more cab service to
the area, we just want you to be fully aware that there may be gaps in
coverage from an insurance standpoint.
Please feel free to call us at Pinnacle
Insurance at 412-816-1000 if you have questions or feel we can be of
service. www.pinnacle4ins.com
