Before You Get Behind the Wheel for Uber or Lyft, Give Your Car Insurance Policy Another Glance.
Are you considering driving for a ride-sharing transportation company like Uber, Lyft, Wingz, or Gett? On February 10, 2017, New Jersey Governor Chris Christie signed legislation giving ride-sharing companies the green light to conduct business in the Garden State. However, most personal insurance policies exclude coverage for commercial activities, like driving for profit.
The New Jersey law requires that the transportation network company driver, the transportation network company, or any combination of the two maintain primary automobile insurance that recognizes that the driver is a transportation network company driver, using a personal vehicle to provide prearranged rides. This means that your automobile insurer needs to know that you are driving for a non-personal purpose. The law recognizes two time periods: (1) while the driver is logged on the transportation company’s digital network, but is not providing a prearranged ride and (2) while the driver is providing a prearranged ride. Coverage through the network company is triggered in time period one when you are signed into the network seeking a customer or on your way to pick the customer up and through time period two, while you are driving a rider.
While logged on but not providing a ride, both parties must carry primary automobile liability insurance in the amount of $50,000 for death or bodily injury per person, $100,000 for death or bodily injury per incident, and $25,000 for property damage. Personal primary injury protection (“PIP”) benefits must be carried by the driver in the amount of $15,000, and uninsured/underinsured motorist coverage (“UM/UIM”). Pursuant to statute, UM/UIM coverage can be no more or less than the liability policy limits.
In the course of providing a ride, each driver, company, or a combination of the two must carry at least $1.5 million in liability coverage for death, bodily injury, and property damage. Both parties’ policies must carry a minimum of $10,000 in medical payment benefits, per person, per incident, for the benefit and coverage of the driver. Uninsured and underinsured motorist covered is also required, in the amount of $1.5 million.
New Jersey’s ridesharing law allows insurers to exclude coverage to an owner or operator of a personal vehicle, while the vehicle is being used by a rideshare driver logged on to the network or providing a prearranged ride. More importantly, insurance companies are not required to use any particular policy language in order to exclude any or all coverage for any loss or injury that occurs in either of the two time periods. Therefore, as a potential driver for a ridesharing company, you should review your coverage for liability, collision/comprehensive, as well as uninsured/underinsured motorist benefits with your automobile insurer and/or independent insurance broker. Many insurers offer policy endorsements to provide protection for ridesharing drivers for the various phases, including driving around logged on to the company’s network or en route to pick up a rider, and in the course of driving the rider.
So whether you’re “in good hands,” your car insurance company has “seen a thing or two,” or you have Flo’s number saved in your phone, it is important for drivers to know and understand the coverage limits included in their personal automobile insurance policy—these potential gaps can leave many uninformed drivers uninsured with personal exposure to lawsuits.
For more information or any questions, please feel free to contact me us at (732) 545-4717.