What happens if you want to go to work driving for a ride-service company like Sidecar or UberX and try to get insurance up front? What happens to your policy if your insurance company finds out you’re driving passengers for hire? Will your insurance pay your claim if you have a fender-bender while driving for a ride service?
I’d love to give you definitive, black-and-white answers to all those questions. But the truth is in a gray area. My reporting and stories done by others suggest insurance companies aren’t crazy about covering you if you’re driving for a ride service, though I did find one driver who said he had no problem with coverage or filing claims.
Josh Wolf, a Lyft driver, wrote about his experience trying to get insurance in the San Francisco Bay Guardian last summer. He related this anecdote:
(A)t least one person has been told by her insurance company that she will be dropped unless she obtains a notarized letter from Lyft saying she won’t be driving for it anymore. The trouble began for this driver, who spoke on condition of anonymity, when she got into a minor fender bender while driving a passenger in March.
“The guy whose car I bumped into was the neighbor of my passenger,” said the driver. “I never heard anything else from Geico for the longest time so I was sort of hoping that it didn’t have an effect on my coverage, but then at the end of June I got the questionnaire in the mail.”
A month later Geico told her that she’d be dropped from her insurance at the end of July unless she can demonstrate that she’s no longer driving for Lyft. Geico said that if she couldn’t get a letter from Lyft, she could send a notarized letter herself and the company “might take it under consideration.”
A spokesperson for the Insurance Information Network of California told Wolf that, “An insurer may even decide to non-renew your policy for failing to notify them of your business.”
Dan, a Lyft driver I talked to for this series, says, “I have heard about people being denied coverage because it was discovered they were driving for Lyft, and therefore their personal insurance policy would not be renewed, or canceled.”
I asked Kara Cross of the Personal Insurance Federation of California if this was happening — insurers canceling the policies of TNC drivers once they got wind of their shuttling people around for money. She said she hadn’t heard of any such incidents. And a Lyft driver I spoke to who got into an accident last year told us he had no problem renewing his personal insurance in August. “I think it depends on what agent you have,” he says.
But if you buy a new car and plan on using it to work as a ride-service driver, there may also be a problem with obtaining personal insurance for just everyday, non-commercial use. I called up the American Automobile Association and Allstate to see if they’d insure me for the personal use of my car if I also happened to use it for transporting paying passengers. Like, could they insure me and just exclude any incidents in which I was working for a TNC?
“If they discover that your car’s being used that way, then that’s going to raise the red flag for any claim,” an Allstate broker told me. “Tracking if accidents have occurred involving such vehicles is difficult, as the insurer will not always have the knowledge that the passenger paid for transport.”
In other words: If you get into an accident, how’s your insurance company going to know if you were transporting a paid passenger or just on your way to the grocery store? (Though the pink mustache may be a dead giveaway. Per the new CPUC rules, all TNC drivers will have to install signage identifying them as a ride-service vehicle.)
Kara Cross says there’s potential ambiguity in these situations as well: “That’s one of the things that’s missing in the CPUC language. There’s no trigger point, really, as far as when coverage switches over when you’re in personal use as opposed to commercial use.”
Lyft driver Alice says when she called her insurance company and asked if they covered ride service vehicles, she was told yes several times before finally someone said no.
“It depends on the agent, quite frankly,” she says. She says another Lyft driver told her that one agent from an insurance company said it could offer her coverage, and another agent from the same company told her it didn’t.
All of these questions, TNC opponents claim, amount to incentives for people to keep their status as ride-sharing drivers secret from their insurance company. My conversations with drivers seem to confirm that.
“I don’t think I should let my insurance company know because I’ll probably get dropped,” one driver said. “I figure the less they know the better,” said another.