Many participants in these programs are confused about the rules and are uncertain as to what to tell insurers.
Despite the fact that the regulations with regards to the auto insurance coverage required by the drivers for rideshare programs such as Lyft and Uber have improved throughout 2014, and many cities have legalized the mobile app based transportation service, Forbes recently reported that many drivers are perplexed by the mixed messages that they have received and continue to opt for silence when it comes to informing their insurers.
This is becoming increasingly problematic as the rideshare programs expand, as crashes could be mishandled.
There have already been a number of accidents involving the drivers at Uber and Lyft, and these have brought a number of issues regarding liability into the spotlight. Many cities and states have faced considerable reconstructions of their regulations in terms of deciding how much coverage a driver must carry and when the commercial side must come into effect (for example, is it when the driver first signs onto the app, accepts a ride, or when he or she actually picks up the passenger). When policyholders have not informed their auto insurance companies that they are rideshare drivers, it can cause financial disaster if an accident should occur.
The rideshare companies have been trying very hard to repair the auto insurance issues experienced by their drivers.
The companies, themselves, have been taking on an ever larger responsibility when accidents occur among drivers that are on duty. The Forbes article showed that the primary source of confusion is in the actions of the drivers, themselves, when they fail to inform their insurers, essentially lying to the personal insurance companies about how their vehicles are being used.
This not only leads to problems when an accident occurs with regards to financial responsibility, but it also brings about accusations of insurance fraud that can cause drivers to face additional fines and/or to lose their personal coverage. As most states require drivers to have a minimum liability coverage, this often means that a driver would no longer be able to stay behind the wheel while on the roads of that state.
Drivers aren’t necessarily lying to their auto insurance companies – though this is sometimes the case. The foundation of the problem is in misunderstandings with regards to mixed messages that there are receiving with regards to what personal insurers provide and what the rideshare companies cover. As there are stories of personal insurers cancelling policies when they discover that drivers are using their vehicles commercially, many of those policyholders are shying away from doing what they are legally obligated to do.