Driving for Uber or Lyft? Better check your auto insurance policy – there are gaps!
When you drive for a Transportation Network Company (TNC) like Uber or Lyft, your car becomes a commercial vehicle since you are providing a livery service for a fee which is excluded on a personal auto policy. Just because Uber says they have a policy that will cover you does not mean much, dig deeper into that contract.
TNC transactions have 3 periods:
- The app is turned on and the driver is waiting for a fare.
- The driver has accepted a fare and is on the way to pick up the customer.
- The passenger is in the car.
Typically a TNC will provide coverage for periods 2 and 3, but period 1 is not covered. If you have an accident during period one, your personal auto may not respond, and neither will the TNC coverage. Some companies are developing special endorsements to provide coverage during this period for an additional fee, while others are not taking on this exposure and are beefing up their policy exclusions.
Before you decide to work for a TNC, do your homework – call your agent to find out how your company deals with the TNC exposure. Also get a copy of the contract with the TNC that shows the periods when the TNC provides coverage a well as what limits and deductibles their policy includes. In many cases their deductibles are $2,500 or more.