Wednesday, May 27, 2015

Potentially Stupid Customer Tricks [UPDATED]

[First posted @ 5-26-15. Please scroll down for Update]

We first blogged on the insurance issues associated with ride-sharing services (eg Uber, Lyft) back in 2011:

"Seeing a business opportunity in millions of cars that sit idle at office parking lots or on weekends, several start-up companies have introduced "peer-to-peer" car-sharing services ... Likewise, renting out your car to someone you've never met (and will probably never even see!) is a dramatic change in the nature of your insurance policy's risk."

Fast forward 4 years, and despite the success of these ventures, and the swelling population of drivers and fares customers, many of the same issues remain. In fact, the very first sentence of this post contains an egregious error: it ain't "ride sharing," which sounds more like car-pooling than what Uber, Lyft, et all actually comprise, which is ride selling (and buying).

These transportation networking companies (TNCs) are, for purposes of insurance, pretty much taxi (or livery) services, and your personal auto policy isn't designed (or priced) to reflect that. The TNCs may offer some protection through a corporate liability policy, but that may apply only when a driver is actively engaged in transporting a customer.

And that's just one of the many insurance challenges facing both drivers and passengers:
■ How much coverage is actually available when the driver does have a fare?
■ How will your insurer react if you have a claim?
■ What happens if you don't tell your agent?
And more. Unsurprisingly, I tend to fall in the "better safe than sorry" camp.

[Hat Tip: P&C Guru Bill M]

UPDATE: Home Office friend of mine sent me this:

"Just saw your post. We've been discussing this issue (Uber, etc); currently our view is that there are 3 stages of Uber: 1) you are listed as available, 2) you accept a pickup request, and 3) you pick up the customer and take him/her to the destination. If an accident occurs during #1, there is coverage. If an accident happens during #3, no coverage. During #2, very grey area."

Thanks! Color me (still) skeptical, though: seems to me that stages 1 and 3 still make one a taxi/livery service (else why advertise "availability?"). But hey, I'm a simple unfrozen caveman lawyer life and health guy.
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