The answer is not as clear as you may think.
From Uber to Lyft, ride sharing companies have revolutionized the transportation industry. In addition to offering a faster and often cheaper travel method than many standard taxi companies, ride sharing services have also presented residents with a new and fairly flexible way to supplement their income – as drivers. However, before you commit to becoming an Uber driver, it’s crucial to understand the many insurance implications that accompany this profession.
What Coverage Does Uber Provide?
According to Uber, as of March 19, 2015, the company provides the following types of coverage that apply to New Hampshire:
- $1 million of liability coverage per incident, which is in effect from the moment a driver accepts a trip to its conclusion. This coverage is primary to personal auto insurance, meaning that it will kick in before the driver’s personal auto policy.
- $1 million of uninsured/underinsured motorist bodily injury coverage per incident, which covers bodily injury to all occupants of the Uber driver’s vehicle in the event that an uninsured or underinsured driver causes an accident with the Uber driver’s vehicle.
- Comprehensive and collision coverage for physical damage to the Uber driver’s vehicle that occurs during a trip up to the actual cash value of the vehicle, with a $1,000 deductible, provided that the Uber driver holds personal auto insurance that includes comprehensive and collision coverage on that vehicle.
- $50,000/$100,000/$25,000 of contingent coverage between trips, which covers driver liability for bodily injury up to $50,000 per individual/accident with a total of $100,000 per accident, and $25,000 for property damage, only if the Uber driver’s personal auto insurance policy completely declines or pays zero. In other words, in this scenario, the Uber driver would have to look to his/her own personal auto policy for coverage first, and that policy would have to decline the claim or pay zero before the driver could look to Uber for coverage.
The graphic below, courtesy of Uber.com, further illustrates what types of coverage are provided to Uber drivers, and when they apply:
Where Do the Gaps Lie? 2 Crucial Coverage Considerations
At first glance, it may appear that you would have sufficient coverage as an Uber driver, but it’s important to take a closer look, especially at the following two considerations:
- Your vehicle is involved in an accident while you have the Uber app on but haven’t yet accepted a trip. Do you have any coverage for damage to your vehicle? As shown in the illustration above, Uber provides you with liability insurance at this time, but comprehensive and collision coverage is not in effect until you have accepted the trip. As a result, you would have to look to your own personal auto insurance for coverage, which brings us to our next issue of whether this policy would cover you in this circumstance.
- Will your personal auto insurance policy provide any coverage while you are working as an Uber driver? Every policy is different, so it’s important to review your specific policy with your insurance agent, but in most cases, the answer to this question will be “no.” This is because personal auto insurance policies typically exclude coverage for commercial activities like using your vehicle as a taxi. Furthermore, some insurance companies have begun opting to not take on this risk at all. In other words, if you are trying to secure auto insurance and disclose that you are an Uber driver, you may find that some companies will not provide you with a quote because they are not willing to take on this high risk commercial activity. Again, every company is different, so it’s best to contact yours before becoming a driver for Uber or another ride sharing company to determine how this could affect your coverage.
At Eaton & Berube Insurance in Nashua, NH, our agents have the experience and expertise you can count on to answer your coverage questions and ensure that you are fully protected. As independent insurance agents, we represent many different insurance companies that we work with to find the best fit for each of our clients in terms of price, coverage, and service. For assistance with New Hampshire auto insurance or any of your coverage needs, call us today at 603-882-2766 or click here to submit our online quote request form.
*This information is valid as of January 2016, but please note that insurance companies are constantly changing to adapt to revolutionary ideas, products, and services like ride sharing companies.