A California broker has started selling add on policies for Uber and Lyft drivers to ensure they are covered even when they do not have a passenger in the car.
The controversial ride share services have become an insurance minefield, with Uber and Lyft policies only covering their drivers while they are en-route to a pick up or actually carrying a passenger. The companies have argued that while a driver is waiting for a job, they should be covered by their personal policy.
But many insurers are denying claims for damages that occur during this time, claiming that the vehicle is still being used for commercial purposes.
Indeed, legislation signed into law by Governor Jerry Brown July, states that drivers' personal insurance will not apply whenever they're logged into the Uber or Lyft apps. But ride-sharing companies are legally obliged to provide coverage during the waiting period, although they only have to cover up to $100,000 in bodily injuries and $30,000 for property damage.
As a result, brokers believe insurers will either try to cancel policies for drivers working for Uber and Lyft, or raise their premiums.
The workaround, it seems, is for drivers to purchase a ride-sharing coverage add-on, on top of their personal policy.
One enterprising broker, Canyon Pacific Insurance in Palm Springs, started selling ride share add-ons last week, claiming that none of the big insurers want to deal with ride share drivers unless they have the endorsement.
Dan George, an agent at Canyon Pacific, told Insurance Business that the endorsements give drivers coverage whenever they’re on the clock to the time they pick up a client.
“It’s only a 10% increase on top of the price of an existing policy,” he said, explaining that it’s very affordable.
Since offering the endorsement on November 24, George said the broker has sold two policies so far and has had “a lot of interest” from other customers. “We have a lot of Uber and Lyft drivers here,” he said.
With more and more people using their personal assets, such as cars and houses, for commercial gain, companies like Uber are blazing a trail in setting new insurance requirements. In the accommodation space, AirBnB is making similar waves. But when asked whether California brokers will follow suit with similar policies to cater to AirBnB operators, George said that there is already a very healthy market for vacation homes in California and existing property policies already have the market well covered.
