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.