So, you’re looking to pick up some extra cash and Uber or Lyft looks like a good option. You have gone through all the steps to qualify and you’re ready to hit the road with that first customer.
But, unless you have what is called a Ride Sharing endorsement, you could be in trouble.
Uber says their corporate auto insurance policy covers you when you have a customer and when you are on the way to pick up that customer. So, you are set. Bring on the first rider and more importantly, the cash from that first customer.
But, wait a minute. There is a gray area of auto insurance coverage in all this and it could cost you more cash than you made. The gray area is the time between when you tap the App to say you are available, but are not carrying someone or on the way to get them. If you have an accident in the gray zone, there is no coverage by most insurance companies.
An area lawyer told me a story recently about such a case. His client had just dropped of a rider. She was a little tired since she was working the best time for rides, which is early in the morning. She was approaching an intersection and it didn’t register the light had changed. She rear ended the car in front of her. Her app had not been switched off and she wasn’t on the way to pick up the next fare. Her insurance company denied the claim.
Most insurance companies exclude coverage for such things as any type of delivery such as pizza, using your vehicle for business and using your vehicle to transport people for a fare.
So. the driver in our story was out $9,000 to repair the damage to her car. The damage to the other vehicle was covered under the Uber policy. The option to avoid this is a Ride Sharing endorsement. I know of only two of our companies that offer such coverage.
Down the line more companies will come on board for this, but for now taking that chance could be too costly.
If you're considering becoming an Uber or Lyft driver, reach out to me and I can shop the companies that cater to those in the ride-share industry. That way you know you're getting the best rate and your new cashflow is protected.