Ridesharing apps like Uber and Lyft have completely revolutionized the way people get around cities—and given the taxi industry a run for their money in the process. These ridesharing companies aim to reduce traffic and vehicle emissions by offering popular Line and Pool services to complete more trips with fewer vehicles. All you need is a smartphone and credit or debit card to ride.
While these services have taken the world by storm, it’s not without its share of unique issues and challenges—chief among them being the problem of insurance. While Uber and Lyft do provide a certain amount of coverage while you are en route to pick up a rider, there isn’t much they offer for the interim when you are waiting for a call.
While ridesharing has massively disrupted public transportation and how Americans get around, the insurance world is scrambling to keep up. CoverHound, an insurance-shopping platform for the auto, homeowners and commercial business industries, recently announced that they’re rising to the occasion to meet the needs of the many rideshare drivers using these services.
When you own a car and pay for insurance, the policy will almost always have the verbiage that says that it doesn’t apply if you are charging people money to drive them around. The two rideshare giants have back-up policies that go into effect if a driver’s personal insurance provider denies the claim because of policy exclusion that prevents the exchange of rides for money.
This puts many drivers in a tricky spot. They can tell their providers the truth about the use of their car commercially and risk a policy cancellation; or, they could omit their activity with the ridesharing company and hope that the insurance company doesn’t catch wind of the truth.
The online insurance company has affiliated with large carriers across 24 states for drivers who use ridesharing apps, like Uber and Lyft. Keith Moore, CEO of CoverHound, told Insurance Journal, that the need for rideshare insurance became clear to him, and the other executives of the company, after using the rideshare app to get around while traveling for business and noticing that many drivers are “in need of education on rideshare insurance, the requirements to carry it, and the benefits of having it.”
Rideshare insurance has been a hot-button issue after a fatal New Year’s Eve accident involving an UberX driver in San Francisco. The driver was in an SUV and drove into a family walking across a Tenderloin crosswalk—killing a 6-year-old girl. Uber said the driver was not covered under their $1 million liability policy because he was in between calls.
“Insurance can’t be content with maintaining the status quo; our industry must keep up with constant innovations and disruptions in transportation and the sharing economy,” said Moore. “Ridesharing is a phenomenon, and we are committed to helping drivers find the coverage they need on our online comparison platform.”
CoverHound is an insuretech company that makes it simple for consumers and businesses to compare car insurance rates among providers in their region. The platform handles most of their business online but also has support available over the phone. States currently served are: Arizona, Arkansas, California, Colorado, Georgia, Illinois, Indiana, Kansas, Maryland, Minnesota, Missouri, Montana, North Carolina, Nevada, New Mexico, Ohio, Oklahoma, Oregon, South Dakota, Tennessee, Texas, Utah, Washington and Wisconsin.
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