Uber, Lyft Finally Beef Up Their Insurance Coverage.

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Uber, Lyft Finally Beef Up Their Insurance Coverage.

The tech-enabled riding company known as Uber, has spoken on Thursday that it has extended auto insurance coverage to working drivers who have yet to pick up passengers. Until recently, Uber and other similar companies that arrange riders and drivers who control their own cars, have argued over insurance polices only applied to drivers transporting customers.

“We will make sure the quote-unquote insurance gap is covered,” said Travis Kalanick, Uber CEO and co-founder. The new policy covers drivers “when they have logged in and made themselves available for requests.”

Urging For A Solution.

Insurance experts have stated long before that Uber and other similar companies has needed to expand their coverage’s.

“If you’re tooling around, if your app (for Uber, Lyft, etc.) is on, our view is that the transportation network company should cover those activities,” said Armand Feliciano, vice president of ACIC/PCI, the Association of California Insurance Companies. “You made yourself available for commercial use so the TNC should step in.”

This issue became big after an accident that happened in San Francisco during New Year’s Eve, where a Uber driver named Syed Muzaffar had struck and killed a 6-year-old girl named Sofia Liu and followed through with the injuries of both the mother and brother. Muzaffer did not have a passenger in the car at the time. But he was supposedly logged onto the Uber application and was awaiting for ride request, according from the lawsuit by Liu’s family and his own attorney.

The Coverage.

Lyft, Uber, Sidecar and other services carry the liability coverage of $1 million per incident. The coverage is supposed to launch off in after a primary policy, the driver personal auto insurance, pay up. But plenty of personal policies exclude commercial use, like carrying any paying customers.

“Personal auto insurance has exclusions for commercial activities and frankly, that’s why it’s a lot less money, because there is less of a risk,” said Kara Cross, general counsel for the Personal Insurance Federation of California. “So you wind up with a gap.”

Uber’s New policy will provide a coverage that amounts to $50,000 for bodily injury to a person, $100,000 for any bodily injuries to all people, and $15,000 for any property damage. This policy will activate when a drivers personal insurance policy will now cover the accident while drivers are logged into the Uber network and waiting to accept a ride..

The cost of the new policy is “substantial,” Kalanick said. “We worked with a particular insurance company to create a new kind of policy. Whenever you do something new in the insurance industry, it always starts out a fair bit more expensive.”

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