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What insurance gaps exist when driving for Uber or Lyft?

October 24th, 2017 | 2 min read

By Horan Companies

Driving for Uber or Lyft in New York State?

Thinking about driving for Uber or Lyft in New York State (specifically central and upstate)?

Ride-sharing is an exploding industry which has taken the use of modern technology and made it simple to book a ride with just a couple of clicks on your Smartphone. It’s also become another way for people to earn some extra money. If you own a car, can meet some basic background requirements, and are over 18, then you can apply to become a driver. Then, just wait for someone to book a ride with you on the app, and off you go; in your car.

With car insurance, New York is on its own island when compared to other states. That is why we were one of the last places in the country to get approval for ride-sharing. Insurance companies have had very little time to craft policy language specific to New York auto policies for ride-sharing. Many companies exclude ride-sharing altogether. Some have certain restrictions, while some are still working out their stance.

What does that mean for you if you decide you want to be a driver? Where are your gaps in coverage?

As a driver, you can log into an app on your phone, and go live when you’re ready to take fares. Once you have logged-in (yes just logged-in), your personal insurance policy is no longer in force. What you then have is liability and basic no-fault coverage provided by the ride-share company you are working for. During this specific time New York requires the company to provide you with $75k per person, $150,000 per accident and $25,000 property damage liability. They also require $50,000 in no-fault (personal injury protection) be carried on the policy. So, regardless of the limits you chose for your personal policy, this is all that is available. While active on the app, but still awaiting a fare, you have given up collision, comprehensive, rental, towing, and any amounts above the minimum liability requirements noted above. Beyond what the ride-share company provides, you are now self-insuring. For example, if you are logged-in to the app and awaiting a fare and it suddenly begins to hail and leaves dents in the car, you are on your own.

Once someone has booked a ride with you, your liability protection improves significantly. While you are enroute to pick them up, your coverage is increased to the New York minimum of $1,250,000 for both liability and un/underinsured motorist coverage. When you pick them up, they are also included in that limit. Now comes the tricky part. If you carry collision and/or comprehensive on your personal auto policy, the ride-share company can elect to provide you with this coverage on their policy. However, the deductibles will likely not match what you have on your personal policy. As of this time, Uber will provide the coverage with $1,000 deductibles, with glass also assigned that deductible. Lyft will do the same, but at a whopping $2,500 deductible!

As soon as the rider exits your vehicle, the insurance reverts to the basic coverage provided for just being logged-in. To restore your personal insurance, you’d need to log off the app altogether.

The emphasis on this is to make sure you check with your insurance carrier to see how they cover ride-sharing. Have them direct you to the specific language within the policy that illustrates their position. Be proactive so you don’t run into surprises later. To learn more about driving for Uber or Lyft in New York State, call 315-635-2095 or submit the form below.