Rideshare Drivers Still Cornered Into Insurance Secrecy

[FrodosPet]

http://www.forbes.com/sites/ellenhuet/2014/12/18/uber-lyft-driver-insurance/#7fd5b8411102

Ellen Huet - Dec 18, 2014

In the last year, car-service app startups Uber and Lyft have made major progress toward fixing their drivers’ insurance issues, gradually taking more responsibility for accidents that happen to on-duty drivers. But one sticky problem persists: drivers often lie to their personal insurance about their work, which can lead to confusion and, in some extreme cases, insurance fraud.

Drivers hear constant mixed messages about proper insurance. Uber and Lyft tell drivers that personal insurance will suffice, but personal insurers, unwilling to cover commercial activity, have started canceling drivers’ policies if they’re discovered. Full commercial insurance, which can cost up to 10 times as much as personal insurance, is too costly for most drivers. Hybrid insurance policies are months away from market, and drivers will give tens of millions of rides in the meantime.

For many drivers, the only solution is to buy personal insurance and hide their status from their insurer. Sometimes that means just not mentioning it. But as more insurance companies are catching on and asking drivers directly if they work for Uber, Lyft or a similar company, more drivers are forced to lie or risk losing their policy.

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The cancellations aren’t flukes. An internal Geico document obtained by the San Francisco Chronicle last month tells agents to reject car-service app drivers and refer them to Geico’s fraud unit. Other large insurers suggested they are equally wary of insuring these drivers, even with Lyft and Uber’s expanding insurance coverage. State Farm spokesman Sevag Sarkissian said the company would be comfortable ensuring strictly the personal insurance needs of “occasional” car-service app drivers, but not those of people who use their cars “primarily” for that work — though he wouldn’t specify where the line would be drawn. Allstate ALL +0.16% and Geico spokespeople only said the companies wouldn’t cover app-related claims and wouldn’t comment on whether they would drop Uber, Lyft or Sidecar drivers. (This isn’t a problem for car-service app drivers who are required to have commercial insurance, such as UberBlack and UberSUV drivers and all Lyft and Uber drivers in New York.)

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[KT2000]

1. I was told by insurance company

that a person who has a job as a caregiver and gives rides to clients to the store, doctor appointments etc., would need commercial auto insurance. It worries me that a lot of women, some of whom are forced into those jobs by states cutting back on welfare, are going to get a rude surprise if there is an accident. These are low pay jobs that do not leave much room for high car insurance costs either.