West Coast insurer launches ridesharing insurance product

Yet another insurance company is offering ridesharing drivers coverage that will bridge the gap between personal and company coverage

Insurance News


Los Angeles-based Mercury Insurance announced Wednesday that it is offering a new insurance product for drivers with ridesharing companies like Uber and Lyft. The product is intended to provide drivers with coverage that will bridge the gap between their personal auto insurance and policies provided by the transportation network company.

Insurance requirements for ridesharing drivers have been the subject of significant controversy across the country, with several states passing regulations that would heighten drivers’ and companies’ responsibilities.

The problem arises when drivers have their company app on but have not yet accepted a ride. Neither personal auto insurance nor company policies have been determined to respond to incidents that take place during this window.

"Many Californians enjoy driving for companies like Uber and Lyft as a great way to earn a living or make extra cash because they can set their own hours, be their own bosses and meet new people," said Jim Reeves, Mercury's research and development group manager. "Many of them are unknowingly putting themselves and other drivers at risk, however, because they don't have adequate insurance coverage in the event they get into an accident when their app is on, but they haven't accepted a ride.

"Mercury wants to ensure these individuals are able to earn an honest living without having to worry about paying costly repair or medical bills out-of-pocket – and we'll be able to offer this peace of mind for as little as 20 cents a day."  

Ride-hailing is divided into three phases:
  • Phase one: Drivers have turned on the ride-hailing app, but haven't accepted a fare
  • Phase two: Drivers have accepted a fare and are on their way to pick up the passenger(s)
  • Phase three: Drivers are transporting passengers to their destinations
Mercury's ride-hailing insurance will cover drivers during the first phase of their trip. This coverage is not provided by personal auto policies and the TNCs provide very limited coverage during this phase, too. This means that if drivers get into an accident during phase one, they will have to pay to repair any damages to their vehicles and the TNC liability coverage is capped at $50,000 per person and $100,000 per accident for injury to others. Mercury's ride-hailing insurance will provide additional coverage above and beyond the TNC coverage and also fix the insured's vehicle in a covered loss if those coverages had been purchased from Mercury.

"Mercury has been protecting drivers for more than 50 years. It's what we do. So, we're very excited to be one of the first companies to extend the coverage to ride-hailing drivers and protect not only them, but the drivers and families with which they come in contact on the road," said Reeves.

Currently, Mercury's ride-hailing insurance is only available to California rideshare drivers.

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