It looks like the question of insurance coverage may finally be catching up with people who drive for app-based services such at uberX, Lyft and Sidecar.
“Private passenger auto policy isn’t intended to cover livery services,” said Nicole Mahrt Ganley, a spokeswoman for the Property Casualty Insurers Association of America. “There is little question that engaging in livery services is a material change in the nature of the risk being insured, and most states would allow companies to cancel coverage in those situations.”
The app-based transportation companies have altered their insurance policies following a high profile crash in San Francisco, where a six-year-old girl was struck and killed by a person driving for Uber as the little girl was in a crosswalk with her mother and brother. Sofia Liu died on New Year’s Eve. Her family later filed suit. Initially, Uber officials said they were not responsible because the driver was not was not “providing services on the Uber system during the time of the accident.”
Since then however, Uber and others have agreed to provide primary insurance coverage from the time the driver accepts a call until the passenger is dropped off. However, when drivers are not carrying a passenger or have not yet accepted a call the question of responsibility remains murky. As part of legislation passed by the D.C. Council, which Uber officials hailed as a model for other communities seeking to regulate such services, the driver or the service would be required to provide coverage.
Drivers for low-cost app-based services such as uberX, Lyft and Sidecar use their personal vehicles to give rides to individuals. They do not work for the services, but rather act as independent contractors.
Still, if drivers begin running into trouble with their personal insurance carriers — or worse if they lose their coverage — that might force the companies or the drivers to rethink the current arrangement. Or it might mean insurance companies will focus on creating new policies that cover people who driver for the services.
The Chronicle notes:
Several insurance companies are working to craft hybrid policies — personal car insurance with “endorsements” to cover drivers when they work through Lyft, Uber or Sidecar, especially during the time in which they have signed into the companies’ apps but have not yet received a ride request. A California law taking effect July 1 that requires more coverage spurred insurers to develop the products. The ride companies’ $1 million policies don’t apply until drivers are matched with a paying customer.