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Uber, Lyft, Rideshare, Oh My!

What you need to know about rideshare and making extra money on the side.

With the evolution of companies like Uber and Lyft, ridesharing has become an increasingly popular way for people to get around town.  And drivers can make an extra buck on their own terms.

Since rideshare started to take off in 2009, there have been a lot of myths and misunderstandings out there. Most drivers have no idea what type of insurance to get.

If you are going to get into the rideshare business, the first thing you need to know is you need different insurance. You’ll need some sort of special protection that’s not covered under your basic personal auto policy. Several Insurance Companies provide this special protection.

Filling in the Coverage Gaps

State insurance laws define three distinct periods when a rideshare driver is on the clock:

  • Period 1: When a driver has turned on the rideshare app and is waiting for a passenger match. During this time the driver could be driving around, sitting idly in their car, or even waiting at home.
  • Period 2: The moment a driver gets a match and is en route to pick up the passenger.
  • Period 3: The time span when a passenger gets into the driver’s vehicle, is driven to the designated location, and exits the vehicle.

Typically, rideshare companies offer liability insurance protection once a driver logs onto the app (Period 1). But rideshare companies typically do not provide any physical damage coverage during that period. A driver’s personal policy will usually have coverage exclusions during all three of these periods.

As a result, there are often gaps in coverage between the driver’s personal policy and what is covered by the rideshare company’s insurance policy.

For example: In Period 1, there are gaps in Roadside Coverage, Uninsured Motorist Coverage, and Medical Payment Coverage.

State TNC (Transportation Network Company) laws typically say that in Periods 2 and 3, the rideshare company has to maintain a million dollars of liability coverage.  Which is a lot more than personal auto insurance covers.

Rideshare continues to soar in popularity as a money-making opportunity.  Make sure you know what your policy covers and doesn’t cover.  Contact your agent for advice.

Get a free rideshare auto insurance quote today with Nicholson and Associates Insurance.

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