Ride Sharing and Your Auto Insurance

Ride Sharing - Uber
(Photo Credit: Uber Technologies, Inc.)

Ride sharing programs (Transportation Network Companies) such as Uber and Lyft have transformed how people get in and around cities. The idea is pretty simple. Using a smartphone app, riders can easily connect to a TNC driver to provide an alternative to traditional taxis and black cars that is convenient, competitively priced, and powered by private car owners. Chances are, you’ve probably either used or at least heard of these services.

It all sounds easy enough, but the concept is not without issues and controversy. One of the biggest issues is how traditional personal auto policies do, or more importantly, do not provide insurance protection when they are being used in a ride sharing program.

In Massachusetts and New Jersey, Personal Auto policies generally exclude coverage for accidents arising out of driving passengers for a fare, known as livery. TNCs do offer insurance plans for drivers when there is a fare in the car. When there is no passenger in the car, but the driver is waiting for a fare, there is a potential significant gap in coverage.

In addition, if an insurance company finds out you are driving your car for a TNC, they may cancel your Personal Auto coverage because of this expanded use. If you plan on driving for a ride sharing (TNC) service, you should talk to your independent agent and learn what you need to do in order to be properly insured and protected

You can read about the full insurance and non-insurance requirements for TNC vehicles and drivers on the Massachusetts Legislature’s website.

Why Your Garaging Address Matters

A beautifully manicured yard with a garden full of perennials and annuals.
(Photo Credit: Fotolia)

How much you pay for your car insurance depends on many things. These include what kind of vehicle you have, how many miles you drive, and who the operators of the vehicle are, among others. Where your car is primarily garaged is also an important factor in calculating premiums. Generally, this is your primary residence.

It is important to make sure the garaging address on your policy is correct. If you move or spend the majority of the year with your car away from your principal garaging address, you need to inform your agent so your policy remains up to date. Failure to do so may result in a denial of a claim and possibly a cancellation of the policy.

If you are unsure of what to do, you should contact your Agent to discuss your specific circumstances.