Ridesharing: Am I Covered as a TNC Driver by my Personal Auto Policy?

Ridesharing Am I Covered as a TNC Driver by my Personal Auto PolicyThe traditional meaning of ride-sharing has evolved in the emerging sharing economy. Today, ridesharing has become an increasingly popular way to make money. But ask yourself, is it worth the risk?

Ridesharing companies such as Uber, Lyft and similar transportation network companies (TNCs) connect people to “for-hire” drivers through the use of a mobile application. Drivers then use their personal vehicles to provide rides to passengers for a fee.

The question is does a TNC driver’s personal auto policy provide coverage for ridesharing? The answer is no.

A Massachusetts personal auto policy specifically excludes coverage to “anyone injured while occupying your auto while it is being used as a public or livery conveyance.” This exclusion applies to ridesharing services where a personal vehicle is being used for commercial use.

According to the National Association of Insurance Commissioners (NAIC), there are three distinct periods when a personal auto policy offers no coverage:

  • Period 1: when the driver logs into the TNC application but is not matched with a passenger;
  • Period 2: when a match is made and accepted, but the prospective passenger is not yet physically in the TNC driver’s car;
  • Period 3: when the passenger has been picked up and is occupying the TNC driver’s vehicle.

The Massachusetts Division of Insurance released the following warning to consumers: “All insurers in Massachusetts will deny coverage should an incident occur if you use your vehicle to provide rides to strangers for a fee or other economic inducement.” Additionally, the warning states that your insurance policy may be non-renewed if your vehicle is involved in an accident while being used in this way.

If you are a ride-share driver, or are thinking about becoming one, it is important that you inform your independent agent. Your agent can help you understand the coverage gaps between your personal auto policy and any coverage provided by the TNC.

For more information on ridesharing services, contact McGrath Insurance Group at 800-342-3859 or visit our website at www.mcgrathinsurance.com

*This article is written for informational purposes only and should not be construed as providing legal advice.