Ride-share alternatives to taxi services are becoming more popular as they expand to more cities. But because they’re so new, both riders and drivers should exercise caution.
Ride-share programs on the surface sound like a win-win situation: if you need a ride, you can download an app to your mobile device to find and arrange transportation in a driver’s personal vehicle. A simple swipe of your credit card pays the driver. So, instead of hailing a taxi cab ̶ which can sometimes be hard to do ̶ you can quickly get where you need to go and the driver is paid for his or her time and distance traveled.
Ride-share drivers, passengers, other drivers on the road and even pedestrians are all affected by the insurance protection provided by the network companies that coordinate the ride-share relationship. Some ride-share network companies advertise that they have insurance policies that can protect drivers and their passengers. But there is no standard policy, and without a policy in hand, it becomes difficult to know which specific circumstances trigger coverage or what situations might be excluded.
Beyond the common-sense concerns related to getting into a car with a stranger, what happens in the unfortunate event of an accident?
If you or a driver in your family is interested in providing transportation services through a ride-share service, check with your insurance agent first to learn about liability you are assuming because no coverage is provided by your personal auto policy. Taxi companies purchase commercial coverage specifically designed to insure livery exposures.
Personal auto policies were not designed to cover exposures like ride-sharing, and livery is always excluded. Ride-share drivers need to know personal auto insurance provides NO PROTECTION for anyone injured or any property damaged in an accident no exceptions.
Riders planning to use ride-share services should also consider the risks. If you are injured while using one of these services, will your medical expenses be covered? The answer is NO. Would you be compensated for the time lost from work that your injury might cause? The answer is NO. Ask to see proof of primary commercial auto insurance coverage limits before using a ride-share service. If a driver only provides a personal auto insurance documentation or a secondary commercial auto insurance coverage assume NO coverage (or you are at mercy of a policy that has numerous exclusions at best).
The ride-share industry is changing rapidly, and some city-states are banning ride share programs for numerous reasons including insurance coverage. Rider-Driver Beware!
By Kirsten Faherty of Cinninati Insurance and Updated By Rick Cornejo
