Rideshare Insurance 101

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If you were to look in the app store, chances are you’re going to see applications like Uber and Lyft ranking as some of the top downloaded applications. Over the last few years, transportation network (AKA rideshare) companies like Uber and Lyft have been attracting drivers looking to make some extra money in exchange for taking passengers to and from their destinations. As rideshare driving continues to attract more and more drivers, insurance companies have had to adapt as well. Most insurance companies will not insure drivers who are using their personal automobiles for rideshare driving. The good news is, Farmers Insurance has a personal auto insurance policy that caters to rideshare driving.

How Does Rideshare Driving Work?

Rideshare driving is divided in to three stages. In stage one, the driver activates their application and waits for a passenger to request a ride. Stage two is when the driver receives a request and begins driving to pick up a passenger. During stage 3, the driver takes their passenger to their desired destination. After the passenger has been dropped off, the driver goes back to stage one all over again.

Why Do I Need Rideshare Insurance?

In September 2014, Governor Jerry Brown (D-CA) signed AB-2293 in to law. This legislation states that rideshare drivers must maintain minimum liability limits of $50,000/$100,000 for bodily injury and $30,000 for property damage. The law also states “a personal automobile insurer may(…) offer an automobile liability insurance policy, or an amendment or endorsement to an existing policy, that covers a private passenger vehicle (…), while used in transportation network company’s online-enabled application.” If your carrier does not offer a rideshare endorsement, then you must find a carrier that does offer that coverage.

With the Farmers Specialty Auto product, you can get the coverage you need for rideshare operations. By having the rideshare endorsement, Farmers will cover you during stage one while you are waiting for a passenger to request a ride. If you are involved in any accident during state one, you may file a claim under your Farmers Specialty Auto policy. It is important to note that as part of AB-2293, companies like Uber or Lyft are required to report to the other party’s insurer whether or not you were logged in to your application at the time of the accident. If you were logged in and do not have the proper rideshare coverage, you claim will be denied.

For questions about rideshare insurance or any other insurance needs, contact our office to speak with one of our licensed agents today.

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