New law approved in California will have an impact on the ride-share market
A new law in California will bring changes to the ride-share industry and how it makes use of auto insurance. Ride-share companies like Uber and Lyft have been at the heart of controversy concerning insurance coverage. These companies provide their drivers with coverage, but only when they are transporting a passenger, not when they are on the way to retrieve that passenger. As such, there may be significant coverage gaps that place drivers at risk because they must rely on their own auto insurance coverage.
Ride-share companies continue to generate drama
The controversy surrounding ride-share companies has intensified recently, with an Uber driver striking a young girl while the Uber application was active. Uber drivers have the application activated to find potential passengers, but the coverage that Uber provides to its drivers is not active until a passenger is actually within the vehicle. Uber claims no responsibility in the incident, which also means that the driver would not be covered by the company’s auto insurance, as per the company’s policy.
Freelance drivers often fall into auto insurance gaps
Freelance drivers working for ride-share companies often fall into insurance gaps, which leave them exposed to significant risks that their own auto insurance policies cannot account for. In order to address this issue, state lawmakers have approved a new law that aims to ensure that drivers have the insurance coverage that they need so that they will not fall into unnecessary gaps. Per the law, insurance companies can provide coverage for freelance drivers when ride-share companies will not provide this coverage.
New law is not likely to have a negative impact on the auto insurance sector
Ride-share companies had opposed the law as it was going through the legislative process, but this opposition did not stop the law from finding approval. Some changes were made to the legislation, however, which have made it more in line with the concerns that ride-share companies have had. The law is not expected to have a dramatic impact on the auto insurance sector.