Many of the industries that provide the conveniences we enjoy today often follow the old adage; the technology has outpaced the law. Or in this case, insurance coverage. Whether you’re driving for a ride hailing service full time or picking up a few rides on the weekend, it’s important to understand how to protect yourself, as well as your clients. The first thing to keep in mind is that there are no personal vehicle insurance policies that cover for-hire livery exposures. Let’s take a look at why Transportation Network Companies (TNCs) complicate your insurance situation. Although it may seem like a casual gig, contractors for TNCs are in a very unique grey area that’s important to understand.

Companies like Lyft and Uber offer some level of insurance to their drivers, more accurately their contractors. However, drivers often don’t realize that there may be a very serious lapse in coverage. When driving our personal vehicles or vehicles with commercial coverage, we never consider when that insurance will apply. Unfortunately, different levels of coverage apply throughout a single ride while working for a TNC.

Here are the “stages” where coverage may differ. Obviously, personal insurance is acceptable (but not necessarily sufficient at state minimums) when the insured is driving their car by themself. The instant the private operator logs into the app through which they are being connected with riders, they enter the “contractor phase”. Remember that this is the point at which personal insurance does not cover what happens until the contractor logs out of their app. How long could that be?

If you’re like a frighteningly high number of TNC drivers who have turned a ride hailing service into a full-time hustle without seeking insurance that specifically covers ride sharing services, you’ve never had adequate coverage. In fact, your personal vehicle insurance almost certainly excludes livery services.1 To make a fair comparison, consider the difference in coverage between personal auto, Lyft and Uber insurance policies.

It can be difficult to discern exactly how much is covered for two very important categories: damage to your own vehicle and bodily injury/property damage in at-fault accidents (both of which are required by state law in Massachusetts). Upon examining both Lyft and Uber’s certificates of insurance for Massachusetts, it becomes apparent that coverage for personal injury protection (PIP) and uninsured/underinsured motorist (UM/UIM) is difficult to define for a driver when they have begun the “contractor phase” of their drive but have not yet accepted a ride.

Here’s a quick infographic on what your current insurance most likely offers:

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So what’s the moral of the story? Thankfully, Kovalev Insurance offers policies that cover drivers who operate as contractors of TNCs. If you want to protect yourself, the best thing to do is either consider weighing the cost of obtaining commercial auto insurance or ask your insurance broker if they can find you a new policy that provides an endorsement which covers ridesharing. For more information about obtaining adequate rideshare insurance, contact your personal broker at Kovalev Insurance to see what your options are.

To summarize:

If you are operating as a contractor for any Transportation Network Company and do not currently have commercial auto insurance or a personal policy with a ridesharing endorsement that explicitly covers ridesharing activities, you are underinsured and at risk.

Disclaimer: Nothing in this div should be interpreted as legal advice. We are not aware of the specifics of your insurance policies and nothing in this div should substitute a consultation with your agent. Always be sure to check your policy and the details with your agent. All information in this div is to be considered general knowledge and should not be considered as an alternative to a comprehensive review of your particular exposure.‍