By Steven M. Ladd
The Horan Companies
Ridesharing is an exploding industry that has used modern technology to make 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, 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.
When it comes to car insurance, New York is on its own island in comparison to other states. That is why we were one of the last places in the country to get approval for ridesharing. Insurance companies have had very little time to craft policy language specific to New York auto policies for ridesharing. Many companies exclude ridesharing 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 Once you have logged in (yes, just logged in), your personal insurance policy is no longer in force.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 rideshare company you are working for. During this specific time, New York requires the company to provide you with only $75,000 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 into the app awaiting a fare and it suddenly begins to hail, leaving dents in your car, you are on your own.
Once someone has booked a ride with you, your liability protection improves significantly. While you are en route 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 rideshare 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 back to the basic coverage provided for just being logged in. In order 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 ridesharing. 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.
Steven M. Ladd is an insurance agent with Horan Companies, Inc. He can be reached at (315) 635-2095 or [email protected].
