Ride-Sharing = Risky Business

Ride-Sharing = Risky Business

— From the pages of FLL#35 • Content provided by Ross Insurance

[pullquote align=”right” cite=”” link=”” color=”” class=”” size=””]Both legislators and insurance organizations are now struggling to catch up to these quickly evolving types of services in what is now being called the new “sharing economy.”[/pullquote]

Ride-sharing services such as Lyft and Uber have been around for some time, but have just recently come to Pennsylvania, and finally here to Lancaster County. The concept is fairly simple: if you need a ride somewhere, you enter your request directly onto the smartphone app, and voilà! Available drivers in your area are instantly notified. Just as quickly, drivers can confirm their willingness to pick you up and get you from point A to point B.

This new business model creates important questions about the risks involved and about who is ultimately responsible if things go badly. What happens if there is an accident? Who pays for the medical bills of the passenger? What about injury to the driver? Who is responsible (and carrying insurance) for the death of a pedestrian hit by an Uber driver, such as what happened in San Francisco, the city of Uber’s headquarters?

Getting reliable answers to these questions may not be easy. On their website, Uber’s Help Center has no “Contact Us” button, no phone number to call, and nowhere could I find solid answers to many of my burning questions.

The lure of easy money, flexible work hours, and the convenience of this type of ride-sharing has created an outright explosion of these types of services. From a quick review of some of the blog posts on this subject, it appears many of the folks giving or receiving these “rides” have not gotten solid answers to many of these questions, either… not by a long shot.

Both legislators and insurance organizations are now struggling to catch up to these quickly evolving types of services in what is now being called the new “sharing economy.” Another major concern is that personal auto policies are almost like snowflakes; no two companies have exactly the same policy language. This puts the rider and the driver in a very difficult position when trying to determine what their exposure really is.

The one fairly consistent message is that virtually all personal auto policies have an exclusion for liability, uninsured/ underinsured motorists, as well as for damage to your car when you are using it as a public or livery conveyance. Basically, if you choose to be a share-aride driver, once you turn on the app, the exclusion kicks in and you most likely have no coverage.

Uber’s website shows that they provide a limited level of coverage if you are driving with the app open and active but are searching for a passenger. The limits increase once you actually accept a trip. But you’ll want to review these coverage limits carefully and talk this over with your insurance agent before taking the plunge.

Several court cases for different scenarios of injury and damage are pending right now all across the country. You probably don’t want to be involved in one of those, so before you enter the ride-share business, be sure to ask the right questions and get comfortable with the answers to avoid what may be an unpleasant surprise.

Ross Insurance
1496 Lititz Pike, Lancaster PA
(717) 397-4729