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    Insurance | 2 min read

    Ride Share Programs: The More Realistic Threat Drivers Are Facing

    Ride sharing programs like Uber and Lyft have caught the attention of many. Mobile technology has, literally, changed the face of ordering a quick ride for a low fare.  For drivers, the pros of creating your schedule, being your own boss, and meeting new people may seem like the ideal way to earn some quick cash on the side. But, not so fast! There may be more to the story than meets the eye.

    While it’s easy to focus on the upside of becoming a ride-share driver, make sure not to overlook the risks. Let’s start with the obvious cons: adding wear and tear to your car; no-tip expectation inferred for riders; and your income completely dependent on rider demand. Seems about it, right? Not quite; let’s dig a little deeper to be sure you’ve properly balanced your pro-con list.

    Are you properly covered?

    I’m not just talking about covering your precious leather seats, I’m talking about in the event that you end up in an accident. Driving with the assumption that you’d never end up in this situation can cost you a pretty penny, or a whole lot of them.

    While ride-share programs like Uber and Lyft do provide some additional coverage for their drivers, it may not be enough. Most private automobile insurance policies contain standard exclusions to limit exposures related to the commercial use of a vehicle, and –news flash- using your personal vehicle in the capacity of a ride-share program would deem your vehicle as a commercial vehicle.

    Does your insurance company have your back?

    Unfortunately, probably not, unless – and that’s a big unless – you have a commercial policy on your vehicle. Ride-share drivers should note that commercial policies, in comparison to personal policies, are – normally – significantly more expensive. Some of that increase could be due to the fact that drivers for ride-share programs are coded as taxi drivers, bringing with it a whole new level of risk and exposure.

    Policyholders should note that you could lose your insurance coverage if you neglect to inform them that you are participating in a ride-share program. This is important to know because if you do get dropped by your insurance company, there’s an even higher chance that you will be paying a lot more for insurance in the future. Insurance companies classify drivers that have been dropped from a policy as ‘high risk’ and your new premiums may reflect this. Talk about a messy break up!

    So, the million-dollar question: in the event of a loss, is your personal insurance sufficient to cover damages? Ride-share program drivers may be in for a big surprise. In the event of an accident, drivers may be left personally liable if their valid insurance coverage denies the claim or if the “blanket insurance protection” offered up by the ride-share program is exceeded.

    For example, if you’re participating as a driver in a ride share program, it’s likely that you are currently holding a personal insurance policy in addition to Uber or Lyft’s blanket liability policy.

    Notice any red flags here? There’s a few. You may assume that since you have insurance that you’re covered in the event of even a minor auto accident. Think again! If your insurance company discovered that you were falsifying the use of your vehicle, they may deny coverage.

    And, although the blanket liability policy offered by ride-share programs will cover damages to other vehicles and drivers that you are at fault for, that leaves you responsible for every penny associated with the cost of repairing your car, and injuries you sustain in an accident.

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    Jacki Cameron

    Jacki Cameron is the Personal Lines Manager for SWBC Insurance Services. She specializes in all personal insurance product lines and has significant experience working with clients who often have varied, unique asset protection requirements. Known for her knowledge and for developing outstanding customer relationships, Jackie has more than 20 years in the insurance business and is a key expert in the industry.

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