We continually receive calls from clients interested in becoming a rideshare driver for services like Uber. Earning extra money and the flexible hours may be attractive, but you could crash into severe financial problems because your personal auto insurance policy more than likely has major gaps in coverage. Trusted Choice® and a member of MAIA recently provided 3 major cautions all rideshare drivers should know:
1. Risks to passengers
Passengers should be aware of two issues. First, ridesharing drivers aren’t currently subject to the regulations that taxi and livery services follow. That means drivers aren’t required to have city-regulated vehicle inspections or background checks, a public safety concern to many cities. Second, if a rideshare vehicle driver has no insurance, the passenger may be forced to hire an attorney and file a suit for injuries against the driver - which can be costly and doesn’t guarantee an enforceable settlement. In addition, the passenger may need to file a claim under his or her own auto policy’s coverage.
2. Drivers may not be covered
Neither ridesharing nor vehicle sharing services are covered by traditional personal auto insurance policies. Most policies already have exclusions that apply when using a vehicle to transport people or property for a fee. Some insurers added an additional endorsement to clarify that someone using a vehicle for ridesharing or renting is also excluded from coverage. Some companies will not renew your policy when they find out your car is involved in ridesharing. Rideshare drivers need additional protection, so find out if your carrier provides such coverage.
3. A rideshare service’s insurance isn’t enough
Some rideshare services offer supplemental liability insurance to their drivers for coverage while they are operating as a rideshare driver. But that does not provide coverage for expenses incurred to repair damage to their own vehicle. It also doesn’t include other expenses that can result from an accident, such as medical bills. Ask the rideshare service for details about their insurance coverage. As always, please call BHS with any questions and we’ll help you navigate the true cost of ridesharing.