It’s the rage in urban transportation. Use an app on your phone, hail an Uber or Lyft driver in their personal car and pay a fair for a trip like a taxi. No hailing cars, no wondering if a taxi will come by and you have track-able progress of your driver. Not to mention reviews of those drivers and car quality. Pretty cool. What’s the problem? Like often happens technology advanced but the insurance world didn’t.
Say you have an industrious son or daughter or sign up to be an driver for one of these services yourself. Flexible hours, work from where you are at the time. Have fairs sent to you by your smart phone. All good so far…. Then, get in an accident. If there’s a personal auto policy that does not contain language like this, I haven’t found it. The language is an exclusion to essentially all of the coverage of the policy. Coverage is excluded when:
“… it is being used as a public or livery conveyance.”
When you accept pay to move persons you invalidate your policy. A parent could have a young adult who drives their vehicle who is trying to be industrious and earn a buck. However they could be exposing mom and dad to uncapped losses after an accident. But don’t these services have insurance? In some cases yes, in others no. In Seattle right now the council is working to accept these services with corporate insurance of $50,000/$100,000 Bodily Injury with $25,000 property damage. So what’s the problem? The responsibility for loss is first and foremost that of the owner of the car. You may carry as much as $500,000 on your liability limits and even an umbrella for an additional $1 million. The injured persons having been paid $50,000 by the ride share company may continue to pursue you as the owner of the car for the remainder of their losses. Unfortunately, you won’t be able to use your insurance to defend against, or pay for, that loss.
The same can be true for delivery jobs; pizza, sandwiches, newspapers while being paid to make those deliveries.