Auto Insurance in College Station Texas

Ridesharing has become very popular in the past few years; companies like Lyft and Uber have grown dramatically in a short period of time by offering a convenient and affordable solution. It is unknown by most driver and riders that personal auto policies and their auto insurance carriers do not cover using a personal auto for livery purposes. To make matters worse, most rideshare drivers are not even aware of this fact, which puts drivers and their auto insurance agency at odds over usage of the covered auto.

The Controversy Over Insuring Rideshare Drivers

Ridesharing services involve drivers who act as independent contractors by using their time and vehicle in exchange for fares collected from passengers. They are different from taxi, shuttle, and limo services as every vehicle is owned by a private individual who uses it to provide a paid service. While the driver is not technically an employee of the company and is a self-contractor, they are still using their personal vehicle to generate income. According to most auto insurance providers, this equates to the vehicle being used to carry persons or property for a fee, which is excluded under almost every auto policy.

Whenever a vehicle is used for commercial purposes, an auto insurance agency requires that it be listed under a commercial policy purchased by either the company or the self-contracting driver. This is because vehicles used for business purposes typically see increased risks in comparison to most personal vehicles. These policies also provide a higher level of liability insurance, usually $1 million or more, all of which translates into a higher premium.

Cars used for rideshare services bridge both categories, creating a challenging situation. They are personally owned vehicles yet are also used for commercial purposes. As such, personal auto insurance policies exclude coverage when transporting property or passengers for a fee. Yet a commercial policy can be very cost prohibitive for rideshare drivers.

Rideshare Insurance Concerns Are Growing

This issue has become so significant that in states where ridesharing is used, insurance companies have brought the matter to the state level. This has become an ongoing discussion on exactly how to handle this issue. Some states and companies are developing rules to help bridge the gap between personal and commercial coverage. Others are suspending rideshare programs until the matter is settled in some standardized manner.

The concern of every involved auto insurance agency is making sure rideshare drivers have the coverage they need to protect themselves, their fares, and everyone else on the road.

Most Drivers Unaware Of the Issue

Surprisingly, although the discussion over appropriate insurance for rideshare drivers has grown considerably, most people who drive for these services are unaware of the risks. A recent study conducted among these drivers revealed that most were either unaware their personal auto insurance policy prohibited this type of use and did not provide any coverage should an accident happen or they simply avoided informing their agency that they were using the vehicle in this capacity so it could be properly rated.

This puts passengers and many other people at risk when a driver picks up a rideshare customer, regardless of whether this is due to ignorance or a driver intentionally avoiding the issue.

The rules on auto insurance for rideshare providers has become a hot topic in recent years as more people see these programs as a great way to provide a great service and earn income. While some carriers are creating insurance policies or endorsements to bridge the gap between personal and commercial vehicles, others are choosing to exclude it altogether. The safest advice for all drivers thinking about using their cars to work for a rideshare service is to speak with their auto insurance agency and let them determine the options available for obtaining the appropriate insurance coverage!

Thinking Of Driving For A Rideshare Service?

First Talk To Jones & Associates About Your Auto Insurance!

Call (979) 599-7532!