The Times They Are A-Changin’ – Bob Dylan
No truer words have ever been spoken, especially in regards to exposures to loss and the insurance industry.
Today, things change at a pace never before seen in human history and some industries (cough, insurance) are not structured in ways (nor should they be) that allow for quick change. At least at nowhere near the speed of new ideas and technology.
Many of these fun, new ideas have exploded in popularity and become massive industries. These include Uber, Lyft, Door Dash, VRBO, TURO, and many more.
While super convenient for consumers, these new activities often create massive insurance gaps for those who choose to become providers of these services.
Using your own personal vehicle as a Taxi, what could go wrong? To start, every personal auto policy contains clear exclusionary language when using your vehicle for livery and delivery. We all know what delivery is, but what the heck is “livery”? Livery is the transporting of persons for a fee. Delivery is the transporting of goods for a fee.
Which simply means, if you are using a vehicle that is on your personal auto insurance policy, that policy is not going to cover you should a claim arise while performing those services. While some of these service platforms might provide to you a little bit of coverage – in no way would I consider any of those adequate. Essentially, you should assume that you are driving without insurance.
Now, many insurance companies are touting “ride share” riders that you can have added to your personal auto policy for a nominal additional premium.
Sounds great. Add a rider to get the coverage back, and I’m good to go now, right? Wrong.
While I haven’t read every carrier’s policy form, I have read well over a dozen – and they all read basically the same. Every rider that I have read removes the exclusion from your personal auto policy while you are logged into the platform’s app on your phone. However…
…every one of them re-trigger the exclusion the minute that you accept a passenger or delivery request on the app. So all the rider does is lifts the exclusion on the policy for the small period of time between logging into the app and accepting a job. This explains why the cost of the rider is a fraction of what it should be.
These riders do very little good, and much more harm by giving vehicle owners the false belief that they are now “insured”. To make matters worse, agents who are selling these riders simply haven’t taken the time to actually read them.
Outside of some unknown insurance company out there who offers a rider that reads differently:
The only way to properly ensure that you are insurance would be to insure the vehicle(s) used for these activities on a Business or Commercial Auto policy that also has the correct business class code for how the vehicle is being used.
Joseph D. Beck, CIC, CPRM, President
