The Rideshare Insurance Gap in Arizona

There has been too much hype and not enough accurate information about insurance gaps for UberX and Lyft drivers in Arizona. I’m going to help you get the real facts.

Is there an insurance gap when you drive for Uber?

Yes, there is a serious gap. There’s also a gap in your insurance when you drive for Lyft. In spite of the conflicting information being thrown at you on the Internet… there is a gap. First however, you need to understand a little bit about the process when you drive for a rideshare company. The TNC (Transportation Network Company) industry has segmented the entire process into three “periods” or time frames.
 
 Period 1 is the time from when you turn on your app until you accept a ride, or as they call it, you are “matched” with a ride. It’s the time that you are “available.”
 
 Period 2 is the time from when you have been matched with a ride and you are in transit to pick up the ride, until the rider actually enters your vehicle.
 
 Period 3 is specifically and only the time when the rider is in your vehicle. The moment that your rider leaves your vehicle, you are back in Period 1, until you either get matched to another rider, or you turn off your app.
 
 THE INSURANCE GAP HAPPENS IN PERIOD 1.
 
 Here’s it is from UberX and Lyft’s own websites:
 
 UberX
 According to Uber’s own website, you are only covered for minimum liability during Period 1. Currently, that is 50/100/25. You are not covered for comprehensive (comp) or collision damage to your vehicle. What that means is simply this: if you are logged in, but not on the way to pick up a rider, you are not covered if you have an at-fault collision. And if you damage someone else’s car, you are covered by only a meager amount of liability insurance .
 
 Lyft
 According to Lyft’s website, if you drive for Lyft you are in the same leaky boat as when you drive for UberX. They put it this way: “when the app is in driver mode before you’ve received a ride request” you get limited liability coverage. How much? You guessed it; 50/100/25.
 
 Both websites also use a big word: “contingent coverage” (Uber) or “contingent liability” (Lyft). What’s that mean? It means that you don’t even have this coverage until your primary insurance company first denies the claim. So Uber and Lyft’s insurance coverage in Period 1 is not even “primary” coverage. In simple English- they don’t want to cover you during the “trolling” time (as it’s often called) when you are logged in but not matched to a rider.

What about Period 2 and 3? I’m covered then, right?

Well, “kinda sorta.” The image above shows an arrow in green and says “full coverage from rideshare company” beneath the arrow. And that’s true, with some qualifications and requirements. The famous “Uber covers its drivers for one million dollars of liability” applies only to liability coverage. Not comp and collision. So if an accident is your fault, and you are in Period 2 or Period 3 (matched to a driver), a whole different set of rules applies. It’s even a separate policy that Uber and Lyft have to deal with damage to your own vehicle. It’s called “contingent collision and comprehensive.” There’s that word again: “contingent.”
 
 So how and when does UberX or Lyft cover me for comp and collision in Periods 2 &3?
 Rideshare companies require that you have comp and collision on your personal auto insurance policy before they extend comp and collision to you during Period 2 and 3. Then and only then will they provide you with comp and colission during Period 2 and Period 3… subject to a $1,000 deductible (Uber) or a $2,500 deductible (Lyft).

So I can buy insurance for this gap, right?

Not yet. But maybe soon. As of the writing of this post (June 30, 2015), there is no way to cover this huge rideshare insurance gap in Period 1 in Arizona. But help is on the way. Governor Doug Ducey just signed a new bill into law, H.B. 2135, on April 9. It goes into effect on July 3rd. In short, it paves the way for insurance companies to begin writing insurance endorsements (think, “add-ons) that will cover you during Period 1 while you are driving for Uber, Lyft or Sidecar.
 
 Farmers Insurance is leading the nation’s insurance companies in catching up to this new industry. Colorado became the first state in the union to offer a “rideshare endorsement” to cover the insurance gap for rideshare drivers. California became the second state in which Farmers Insurance created the first product in the state to cover this huge gap for Uber, Lyft and Sidecar drivers.
 
 I’m staying on top of the new Arizona legislation, and how insurance companies plan to develop new policies to help rideshare drivers. I want all rideshare drivers to come out of the shadows and drive safely, proudly and fully insured. My business exists to serve your business.

Joe’s Insurance
 (480) 940–0909

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Originally published at www.joesinsuranceplace.com.