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The Complexities Of Rideshare Insurance Coverage In New York

Navigating new rideshare laws and their impact on insurance coverage disputes has become increasingly more complicated. With the passage of legislation last year, rideshare companies such as Lyft, Uber and Ride are mandated to provide vehicle liability insurance of $1.25 million per occurrence once a passenger is being driven. The law describes a rideshare driver as a TNC ("Transportation Network Company") driver and the passenger as a TNC passenger. But what happens if the accident occurs while a TNC driver is driving to pick-up the TNC passenger? What coverage then applies: the personal liability insurance or the mandated insurance?

Mind The Gap

For the most part, a TNC driver who is not considered "on-the-job" (their app is on, ready for passengers) and is driving for their own personal use, an accident would have to be covered under a personal liability policy. The opposite is then likely the case for when a TNC driver is on-the-job and driving a passenger from their pick-up location to their destination. However, the "gap" as mentioned earlier is the trickier scenario. The TNC driver's app is on and they get in a car wreck with no passengers on board.

How Uber Is Handling Coverage

Likely the biggest and most popular rideshare company out there is Uber. According to Uber's website, they have attempted to rectify this "gap" period issue with their own policy. Most of it hinges on whether the TNC driver is online and the presence of a TNC passenger. If a TNC driver is offline (their mobile device is not available for attracting passengers), the TNC driver must maintain his or her own personal liability coverage. Once the TNC driver switches their mobile device to go online, Uber provides "primary rideshare group insurance" which during the online but no passenger stage, means auto liability, PIP ("Personal Injury Protection") and uninsured motorist coverage.

What This Means For The Insurance Industry

As New York rideshare legislation continues to evolve and will likely change again as the rideshare industry grows, it is more imperative than ever that insurance companies are especially abreast of how laws, like the insurance mandate, impact their policies and coverage issues. Seasoned legal counsel focused entirely on insurance defense could be the solution to such complex coverage scenarios.

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