Driving for a company like Uber or Lyft may seem like a great way to earn some extra cash, but what happens if you’re in an accident?
Most people assume that their personal insurance policy protects them, but this isn’t the case. You’re a member of a transportation network company (TNC) and alternate rules apply.
Business or Personal Use
According to insurance companies, by driving for one of these ride hailing companies, you’re providing “livery” services because you entered into an agreement with a company as a driver and you charge a fee. You’re not driving your vehicle for personal use anymore.
Your personal auto insurance policy won’t protect you, because it excludes coverage for business and livery use.
Most drivers don’t tell their insurance company that they drive for a rides hailing company. However, your policy or application includes a small clause that says they can revoke your coverage if you fail to disclose pertinent information.
Driving for a ride hailing company increases your mileage and your chances of an accident. If you try to submit a claim, they’ll likely deny it and they may even cancel your policy.
Most TNCs do offer insurance, but many problems exist with what they offer.
First, you’re only covered when you have a fare through the company’s system. Therefore, when you’re on your way to pick up a passenger or on your way back home after dropping off your passenger, you are not covered by the TNC’s policy. Second, they can change the coverage without notice. Third, they may not pay out on a claim unless you file with your personal insurer first. Fourth, you’re still on the hook for any amount above their limited coverage. Fifth, these policies can have very high deductibles and finally, they often have no collision coverage at all.
This means that you need insurance beyond your personal vehicle insurance policy and a superior choice to what the TNC offers.
How Much Can You Afford To Lose?
If you’re driving to make money, you’ll pay more for fuel and maintenance, but what happens if you’re in an accident?
Without proper coverage, you could easily pay hundreds of thousands of dollars if you get into an accident.
You’re not covered under workers’ compensation either, because you’re a 1099 contract employee. If you’re injured, you’ll pay for your own medical bills unless you have additional insurance.
Statistics show 90% of ride hailing drivers don’t have proper insurance. This is very concerning considering they drive more than most people and they’re carrying passengers.
If you get in an accident without proper insurance, you take full financial responsibility for all the damages. Considering these might include fixing your own vehicle, other vehicle or property damage, and medical bills, you’re putting your future at risk.
If you are already driving for a ride hailing company in Rhode Island or you’re thinking about it, contact us for advice. We can find you a policy that would provide you with the specialized ride sharing insurance that you need!