Ridesharing and vehicle sharing services are offered in cities across the nation and the globe. Are there risks to Ohio drivers and passengers who participate? Yes, and the right insurance coverage is key. Here’s the fine print.
1. Risks to passengers
There are two issues that put passengers at risk. First, rideshare drivers aren’t currently subject to the regulations that govern taxi and livery services. That means drivers aren’t necessarily required to have city-regulated vehicle inspections or background checks, a public safety concern to many cities.*
Second, if a rideshare vehicle driver has no insurance, the passenger may be forced to hire an attorney and file a suit for injuries against the driver – that can be costly and doesn’t guarantee an enforceable settlement. In addition, the passenger may need to file a claim using their own auto policy’s medical payments or uninsured motorists coverage.
2. Drivers may not be covered
Neither ridesharing nor vehicle sharing services are covered by traditional personal auto insurance policies.
Most policies have exclusions that apply when using a vehicle to transport people or property for a fee. Some insurers added a clause to clarify that anyone using a vehicle for ridesharing or renting is excluded from coverage. Some insurers will not renew your policy when they find out your car is involved in ridesharing.
Some cities have adopted regulations for rideshare drivers, such as vehicle-for-hire licenses, background checks and vehicle inspections. There is also bill in the Ohio legislature that seeks to establish regulations that might override various city regulations.
It’s important to know the regulations before you engage. And rideshare drivers need additional protection, so find out if your insurer provides such coverage.
3. What insurers are doing
Insurance companies are addressing this issue in one of three ways:
- Absolutely excluding coverage on the drivers’ personal insurance as long as the app is turned on.
- Developing endorsements that can provide some coverage in exchange for additional premium.
- Developing special business auto insurance policies for rideshare drivers.
4. What should a consumer do?
Call us to get the facts about your own coverage so that you can make an informed decision.
* Columbus approved such regulations in July 2014.
Ridesharing in Ohio: know the facts before you participate
Ridesharing means vehicle owners can transport passengers in their own cars for a “donation.” Drivers enroll in a service that connects them with passengers using a website or smartphone app. Passengers arrange rides and pay with a credit card via the app.
Vehicle sharing lets car owners rent their cars to others when not in use.
Rideshare services are increasing in use in Toledo, Cleveland, Akron, Dayton, Cincinnati and Columbus, but why are participants cautioned to learn the facts before engaging?
What can go wrong?
At the heart of the controversy is that ridesharing isn’t regulated like a taxi service, which creates critical safety and insurance considerations.
Insurance became an issue in 2013 when a child was struck and killed by a rideshare car in California by a driver who was awaiting a fare. The rideshare company said the driver wasn’t covered by their insurance because he wasn’t carrying a passenger, leaving the driver financially responsible.
The case is still in litigation, but it is estimated that damages could go as high as $20 million.
If you want to engage in ridesharing, call our office to discuss. We’ll review your policy and help you clarify your coverage and risks.
This information brought to you by Hubbard Insurance Agency, a proud member of Professional Independent Agents Association of Ohio, Inc