California rideshare insurance provides protection for everyone using these services. Over the last few years ridesharing has exploded in popularity. Through smart phone apps offered by companies such as Uber, Lyft, Uber Eats, Doordash, and Task Rabbit customers needing a ride, or an item delivered, can hail a driver to perform the task. These companies are also known as Transportation Network Companies (TNC). The reason for the huge popularity of these services for most customers is the complete convenience. By simply opening the desired App on their smart phone, a customer can hail a ride and/or order fast food to be delivered to their location.
These services offer much faster service than traditional companies which offered the same services in the past. Through an extensive network of independent drivers using their personal vehicles, the TNC companies are able to have drivers available in the immediate vicinity of incoming requests the majority of the time. This aspect of the new “rideshare community” greatly decreases delivery and arrival times. Through the use of independent drivers, the companies are able to keep their operating costs lower. With their operating costs being lower, they can offer these services with lower rates. This also adds to the preferred experience enjoyed by the customers.
Does your personal auto insurance provide coverage for ridesharing?
The TNC companies do provide some insurance. Being an independent driver does raise an issue when speaking of insurance for the driver’s vehicle. While the vehicles used for providing the ridesharing services do not typically require commercial vehicle insurance, personal auto insurance does not provide coverage for vehicle used to earn income. There are many reasons for this, but the primary reason is that typically a commercial vehicle is driven more often and for more miles. Statistically speaking, the more miles a vehicle is driven, the more likely accidents and/or losses will occur.
Commercial insurance can be cost prohibitive for drivers who use the apps to get ride and/or delivery requests. Thankfully, several insurance companies have started offering “rideshare insurance” policies. These policies are actually considered hybrid policies, as they provide coverage in differing amounts at different times that the vehicle is in operation.
How does California rideshare insurance work?
If you’ve done any research on this topic at all, you’ve probably read or heard of the three periods of coverage for California rideshare insurance. We consider rideshare insurance to have four different periods when speaking of coverages. The four period consist of the following:
Period Zero: This period provides coverage while the TNC app is turned off, and the driver is operating his/her vehicle outside of the rideshare community. The vehicle, Driver and Passengers are covered as per the limits of the personal auto policy.
Period One: This period is when the driver has the TNC app turned on, and is waiting for a ride/delivery request. The TNC policy has limited coverage while the Ride Share policy provides full coverage in excess of the TNC policy and up to the ride share policy coverage limits to include uninsured motorist, medical payments, commercial multi policy and collision. (Without ride share coverage a driver is vulnerable to liability during this period especially)
Period Two: This period begins when a ride request has been accepted via the TNC app, and the driver is enroute to the pickup location. The TNC policy kicks in fully with $1M coverage for third party Liability, $1M Uninsured & Underinsured Motorist, Commercial Multi Policy & Collision. The personal California rideshare insurance policy will cover a gap in deductible up to $1,000 & provide coverage in excess of TNC policy if excess coverage is in place.
Period Three: This period begins once the rider is in the car and ends when the ride is completed. The rideshare coverages are the same as in period 2.
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