Ridesharing- are you insured when you are the driver? or Passenger?

Over the last few years, “Ridesharing” has become a word that people are familiar with. During the tough economic times of the last years, many people who own cars and are in need of additional income, have turned to the UBER and LYFT systems of “Ridesharing” to earn money or keep costs down in getting places. We all know how it works. Drivers register their passenger autos and selves in order to be able to do pick-ups and drops offs. This also now works for delivery service as well. Two years ago, I did a story on UBER and found that their system was one that ensured that the driver and the passenger were protected from any harm of legalities. They checked out the car, the driver and from what I understand, those who signed up to be passengers also were monitored.

Now, as more and more consumers are using these “ridesharing” systems, we are learning that each states insurance rules and regulations make it a little harder to be sure that when you enter one of these vehicles, you are indeed safe and insured! Let me explain this in greater detail and yet in simple terms. Here is how coverage works with the standard insurance that these companies say you MUST have in order to be a driver for them:

Understand, this is the drivers policy on his vehicle that he is paying for-

When the driver logs on to the service to advise that he/she is ready to take on a rider, the insurance policy that is carried on the vehicle is no longer the same as it was when that driver was using for personal use. The auto is now covered under what is termed “LIMITED COVERAGE” .When the driver picks up a ride, the “RIDESHARE” company’s COMMERCIAL COVERAGE goes into effect. When the rider leaves the vehicle, the “commercial coverage” ceases to be in place (until the next passenger enters the vehicle).

What this means is that if you are one of these “Ridesharing” drivers, you are not fully covered during the periods of time when you do not have a rider. This increases your liability greatly and this is a fact that many drivers are unaware of. Several states have made some adjustments to this growing industry and in Illinois, the first insurance company to take a stand on protecting its insured drivers, Farmers Insurance is now offering a program called FarmersRideshare.

What this program does is provide an economical solution for non-professional drivers, who otherwise may pay more through a “commercial policy”. Through this program, an insured motorist can know that when they are signed in to take a rider, even when they do not have a rider, as they drive from point A to point B, is fully covered. This alleviates the added stress that comes from the fear of “what if something happens?”.

So far, it appears that this is the only Illinois Insurance Company to step up to the plate, No longer will a driver be faced to worry about certain potential insurance gaps. FYI- this program is not valid for those who drive UBER Black/UBER SUV programs as they are considered “commercial” programs, meaning if you do drive in this program, ask your insurance carrier to make sure you are properly covered on a COMMERCIAL POLICY.  If you have Farmers Smart Plan Auto policy, Rideshare can be added as an endorsement to same.

For more information, visit www.farmersinsurance.com

This information was obtained in an interview with local agent Ken More, who has offices in Chicago, the Northwest Suburbs and Aurora. His office can be reached at  1-800- 7DIAL-US (1-800-734-2587)

The call is free, the information, priceless.