To Uber Or Not To Uber? That Is The Question.

Blog, Insurance


In today’s electronic age of buying products and services via the internet, most transactions require the consumer to accept an agreement of terms regarding how the product will be delivered or how the services will be performed. Many of us under either personal blind trust in the honesty of mankind or simply the need to complete the task at hand in a short amount of time, accept these agreements by checking the appropriate box and hitting submit.

Transportation Network Companies (TNC) such as Uber and Lyft have become a very popular method of providing and receiving transportation services. Advertisements by these companies to attract drivers is simple and to the point: Own a car? Make some extra money on your schedule. Downloading the app to be a driver is also a simple process and easy set up to begin receiving ride requests and bids. Auto insurance must be in force either through the TNC or the individual driver. The driver can choose to purchase coverage through the TNC, however the percentage of the total fee that the TNC now keeps makes the profit for the driver minimal at best. Most drivers decline the TNC coverage and agree to provide their own coverage thinking that their personal auto policy will cover this activity which it will not. Personal auto policies specifically decline coverage when a vehicle is being used as a taxi or livery service. Livery is defined as “the drop off or pickup of goods or people for a fee.”

Ohio enacted a new law on March 23, 2016 setting up statewide insurance-related coverage requirements as the best approach to protecting the safety of Ohio TNC drivers, passengers and pedestrians for a number of reasons recommending that: 

  • Uniform coverage with primary coverage through TNC eliminates guesswork out of potential liability issues
  • Allows drivers to work seamlessly throughout the state
  • Provides consistent levels of protection to passengers and pedestrians

The law establishes the following minimum auto liability insurance coverage requirements for TNC drivers:

  1. When logged on to the TNC’s app-based system enabling the driver to accept passenger requests but before engaging in the actual service (referred to as ‘Period 1’)…
  • $50,000 coverage for bodily injury liability per person
  • $100,000 of coverage per accident for bodily injury

Liability if two or more people are injured

  • $25,000 for property damage of others
  1. Upon passenger pick up (engagement) known as ‘Period 2’: Insurance coverage must be at least $1 million in liability and property damage per accident.

Insurers are now redefining the question on the insurance application to specifically ask if the insured will be participating and using the car in a TNC. Carriers are also sending out notices to existing personal auto customers informing them that this activity is not covered on the policy under any circumstances and if it occurs, it could result in an immediate notice of cancellation. Others are offering an endorsement to provide the proper coverage as required by the new law and the premiums are a substantial increase. Some companies will require the driver to purchase commercial auto insurance which is also quite pricey.

If you are going to be a TNC driver: Know what your insurance policy will or will not cover.

If you are going to be a TNC passenger: Make sure the driver is insured and credentialed properly.

Also, find out from your insurance company (auto and/or major medical) if and how your policy would cover your injuries sustained in an accident if the driver’s insurance is inadequate, non existent or declined.

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