In the “gig economy’ freelancing, temping, and “sharing” are a part of financial reality for millions of people. The people offering their services to rideshare companies where they use their personal vehicle for business are mostly male, young, urban, and members of lower income ethnic groups. These jobs provide a vital boost to the finances that can make the difference between just getting by, and having a good year. However, there are darker aspects to these companies that need to be frankly discussed.
For many, using services like these has become a fact of life. Drivers bring restaurant meals, pick us up after a night on the town, stop at the grocery store for Tylenol and chicken broth when were sick, and even bring extra mobility to those who are not considered disabled but have problems getting around.
Nobody likes to use the term “exploitation” but in this case no other term fits. It has been documented that a number of drivers are recruiting new drivers and giving them tips in some online forums on how to drive without upgrading their insurance.
This means that anyone using their personal vehicle to participate in these kinds of activities without obtaining commercial vehicle insurance to cover their risk are committing insurance fraud. Recently a business insider poll extrapolated that 72 percent of drivers did not know about coverage offered by their insurance carrier. Even scarier, 92 percent of drivers kept their insurance companies in the dark about their commercial driving.
Why do you need this ridesharing insurance?
Personal auto insurance generally has what is called a “livery exception” – this means that your personal vehicle cannot be used as a taxi, limousine, or delivery service. It will not cover any expenses from accidents that occur while you’re driving for commercial purposes – whether you are carrying people, food, or groceries. You may have your personal policy, while also taking any insurance that your company offers.
Some rideshare companies offer comprehensive and collision, with a $1000 or $2500 deductible and coverage for up to $50,000 in damages. Liability limits before accepting a ride request and/or without passengers is $50,000 per person, $25,000 in property damage, and $100,000 per incident. Coverage limits with passengers and while en route to a ride request are $1 million of liability and $1 million of coverage for uninsured or underinsured motorists. You may not be covered at all by the companies insurance or your personal policy if you are sitting with the app on but have not as yet had a ride request.
Making sure that you are covered means that you can pursue your gig secure in the knowledge that you and your vehicle are insured, and will be able to adequately recover financially and medically in the event of an accident. The most prudent thing that you can do is to speak to an independent E&L Insurance agent about what kind of coverage you need.