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Ride-Sharing Insurance Gaps


PROBLEM: Regulation has not kept pace with the rapid growth of ride-sharing services such as Uber and Lyft. As such, there’s no statute that specifically addresses insurance coverage requirements for ride-sharing companies and/or drivers. Until rules of the road are in place, the personal and financial safety of consumers, passengers, and drivers is at risk.

BACKGROUND: Personal auto insurance policies (PAPs) are not intended to cover the higher risks associated with using a car for commercial purposes, which is why the typical standard PAP contains a “livery” exclusion that applies when the vehicle is being rented out or used to carry passengers for hire. This exclusion means any damages or losses sustained when the car is being used for ride-sharing activities will not be covered. The policy also will not provide coverage for the driver or passenger if either is hit by an uninsured or underinsured driver, and won’t provide coverage to repair the driver’s vehicle if it is damaged while being used for hire.

Ride-sharing companies may have commercial liability coverage, but it’s not clear when it applies. Does it apply when drivers have the app on but have not yet been matched with a passenger? Does it apply after a passenger has been dropped off? Without policymakers taking action, uncertainty about whether there is proper coverage for injuries or damage caused by an accident will continue.

SOLUTIONSenate Bill 1118 by Sen. Simmons, and House Bill 509 by Rep. Gaetz ensures adequate insurance is in place to protect drivers and passengers. The bill: 

  • Develops clear guidelines that define when ride-sharing-company coverage begins and ends,
  • Requires companies and/or their drivers to carry primary coverage that specifically applies to livery activity, and
  • Requires disclosure about what insurance coverage is being provided, when, and by whom.  

CALL TO ACTION: Support passage of SB 1118 and HB 509. 

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