Governor Cuomo recently signed legislation to implement ridesharing in New York State. It takes effect on June 29, 2017. This means that you will be able to use your Smartphone app to hire a ride with a Transportation Network Company (TNC) like Uber and Lyft.
If you’ve ever used the service in other states (we have experienced Washington, D.C. and Los Angeles) you know how convenient it is. You summon a ride on your smartphone and it’s there in minutes. No tip, no cash. All taken care of online. And you ride in regular passenger cars driven by their owners.
It’s a great way to get around, especially if you anticipate some fun in a local bar or restaurant. Just summon Uber and you don’t have to drive. For those in the larger cities, it’s faster than public transportation and, in our experience, the car is there for you in the blink of an eye.
So what if you want to drive for a TNC like Uber and make some money on the side? The first thing you might think about is your car insurance. What if you’re sued for hurting someone in an accident? What about your car? Will your own policy pay for the lawsuit or your collision claim? Remember, you’re now using your vehicle for business.
Here’s what we know so far about what this new law means for Personal Auto Insurance in New York State.
If You Use Your Personal Vehicle for Ridesharing in New York State
All personal auto policies in New York State carry a “livery” exclusion. This eliminates liability coverage for you while using your car to transport people for hire. It also eliminates coverage for physical damage to your car. That’s the Comprehensive and Collision coverages that pay to repair or replace your vehicle.
Specifically, your policy excludes, “…any vehicle while being used to carry persons or property for a fee (other than in a car pool arrangement).” This clearly applies to your personal car insurance policy when you’re getting paid as an Uber driver.
Having said that, the TNCs are required by the new law in New York State to provide liability insurance for its drivers. Limits of liability that must be provided by the TNC for the driver are the following:
If you’re driving alone to a pick up.
- $75,000 per person and $150,000 per accident of Bodily Injury Liability if you’re sued for injuring someone else.
- $25,000 of Property Damage Liability for damaging another person’s car or other property.
While you are carrying a passenger.
- $1.25 million for both Bodily Injury and Property Damage Liability.
Coverage on Your Vehicle from Uber Only
- $1,000 deductible Comprehensive and Collision Coverage for those who already carry Physical Damage on their personal auto policies. (We aren’t sure yet whether Lyft will offer the same.)
The upshot: don’t rely on your regular, family auto policy to cover you if you drive for Uber or any other TNC.
Notice that even traveling to a job, your TNC picks up the coverage. And the $25,000 of Property Damage Liability isn’t what we’d recommend. After all, what if you hit a Mercedes Benz. $25,000 might pay for half if it’s totaled. So we recommend you get quotes from your TNC for higher limits on both bodily injury and property damage liability.
The other important thing to remember is that the coverage on your car itself offered by Uber is $1,000 deductible. And you must already have coverage on your personal auto policy for this to apply.
So if you’re thinking of becoming a driver for Uber or Lyft, be sure to contact your TNC and make sure they get your insurance coverage in place.
We will continue to monitor the new law as it affects our insurance companies and clients. So be sure to call us with any questions about rideshare insurance here in Central New York. You don’t have to be a client to call, we welcome all inquiries.
Until next time,
Your SZW Team
SZW Insurance is your New Hartford area independent insurance agent. Call us for a quote on insurance for your home, car, business, or life at 315.792.0000. Or request a quote here.