Notice to Transportation Network Company Drivers

 Technology based ride-sharing ventures, such as Lyft and UberX, continue to grow in popularity.  These ventures – sometimes called ride-sharing programs or transportation network companies (TNC) – rely on apps and other online-enabled platforms to connect paying passengers with drivers who use their own personal vehicles to provide transportation to these passengers.  If you drive for a TNC, you should be aware that while every personal automobile insurance policy differs, most policies contain exclusions for livery.  If a policy contains a livery exclusion, this means that the policy generally will not provide coverage for liability incurred while driving passengers in exchange for remuneration, other than an expense sharing arrangement, such as a carpool.  You should read your policy to determine its specific exclusions from coverage, but a typical exclusion is set forth below:

 We do not provide coverage … arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This exclusion does not apply to a share-the-expense car pool.

Based on this or similar exclusions, insurance companies might deny coverage to TNC drivers who are involved in an accident while driving for hire.

 Before you start driving for a TNC, you should contact your insurance agent or broker (also known as a “producer”) or insurance company to discuss your potential insurance needs when driving for a TNC and to identify any potential gaps in your current coverages.  You may need to consider increasing coverage limits and buying a commercial policy with liability,[1] uninsured/underinsured motorists (UM/UIM), [2] personal injury protection (PIP),[3] or comprehensive and collision coverage[4] to be certain that coverage exists for damage or bodily injuries you cause others as well as for damage to you, your car and/or for damage caused by an uninsured or underinsured motorist while you are driving for hire.

[1] Liability insurance protects policyholders when they have caused an accident.  There are two types of liability coverage that are required by state law: bodily injury liability coverage and property damage liability coverage.

[2] UM/UIM provide bodily injury coverage when the party at fault does not have liability coverage, or the minimum liability coverage is insufficient to cover the injuries.  UM/UIM provide coverage for damage to your vehicle caused by an uninsured or underinsured motorist.

[3] Personal injury protection provides coverage for reasonable and necessary expenses for hospital, medical and disability benefits, as well as certain lost income caused by an accident.

[4] Comprehensive and collision coverage cover physical damage to your vehicle not caused by an uninsured or underinsured motorist. Collision coverage covers damage to your vehicle caused by collision with another vehicle or with any other object, as well as vehicle upset (overturn). Comprehensive coverage covers damage to your vehicle caused by a factor other than collision, such as fire, theft, windstorm, flood, vandalism, etc.

Issued May 1, 2014