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.

What is Automatic Emergency Braking?

automatic emergency braking
(Photo Credit: Ford Motor Company)

Yesterday the U.S. Department of Transportation (National Highway Traffic Safety Administration) and the Insurance Institute for Highway Safety announced that twenty of the world’s largest car manufacturers pledged to make automatic emergency braking (AEB) systems standard on all of their new vehicles starting no later than September of 2022. The NHTSA estimates that this commitment from automakers will make AEB systems standard three years sooner than through a formal regulatory process. The IIHS estimates that during those three years, standard AEB systems will prevent 28,000 rear-end collisions and 12,000 resulting injuries.

 

Automatic Emergency Braking is a forward collision mitigating safety feature that helps prevent or reduce the severity of collisions. AEB integrates radar/laser and cameras along with a computer that gauges a vehicle’s speed relative to an object (a slower or stopped vehicle, pedestrian, cyclist, etc.) in front of it. In the event of an imminent forward collision, the car’s AEB system warns the driver of the possible collision, using alert sounds, lights, and/or tactile feedback such as vibrating the steering wheel.

 

If the system detects that the driver is not doing enough to avoid hitting the object, i.e. the driver may be distracted, fatigued, or experiencing a medical problem, AEB will apply the brakes to stop the vehicle, ideally with enough time to avoid the collision, or at least greatly reduce its severity.

 

Currently, AEB systems are available on about a quarter of new cars, and the NHTSA now considers automatic braking in its 5-Star ratings. The IIHS requires new vehicles to come with AEBs in order to qualify for a Top Safety Pick+, the highest award possible. According to the IIHS, vehicles with an AEB system are 14 percent less likely to experience a forward collision than vehicles that do not have it equipped.

 

You can read the official press release about the automaker AEB commitment on the NHTSA’s website.