Drivers for ride sharing services will soon be able to buy an amendment to their current policies.
Ride share service drivers from companies such as Uber and Lyft will soon be able to buy an amendment to their auto insurance coverage that will provide them with protection from the moment that they sign on and are waiting for a call to pick up a rider, which is a new California law requirement.
This has allowed for the creation of a type of hybrid personal commercial insurance policy for those drivers.
In this way, the auto insurance gap that has been causing some issues in California will be bridged. According to the California Department of Insurance deputy commissioner, Chris Shultz, there are at least five insurers that are looking into new coverage products to be able to offer ride share service drivers.
The department has now announced that it is ready to accept applications for these hybrid auto insurance policies.
Those insurance policies will provide coverage for drivers from the moment that they sign in to the ride share smartphone app, indicating that they are prepared to begin accepting riders, even when they have not yet specifically received a request. The industry refers to that span of time as Period 1.
At the moment, there has been an insurance coverage gap, as the $1 million policies for the ride share services don’t become active until a driver has actually accepted a ride request and is on their way to pick up a customer (though there are some that will offer a lower coverage during Period 1). At the same time, personal insurance policies frequently will not cover for-hire driving at all. This is what causes the gap.
That said, a new law in California, AB2293, will go into effect on July 1, 2015, and will establish a minimum Period 1 coverage amount. This has made it possible for drivers to be able to ensure that they have the necessary auto insurance coverage during that span of time that had previously formed a gap, and the department is now ready to accept the product applications of insurers.