New law targets ride-share companies, requiring them to have more insurance coverage
A new law in Texas will require drivers for both Lyft and Uber to have more auto insurance coverage. The law also applies to all Transportation Network Companies and is meant to address concerns regarding a gap in auto insurance for drivers. Previous to the law, drivers were required to have a minimum of $30,000 per person injured in an accident, $60,000 per accident, and $25,000 in property damage per accident. Typically, this degree of coverage was enough to handle most incidents that occurred on the roads.
Companies will have to provide $1 million in coverage for drivers transporting passengers
Now, drivers employed by Transportation Network Companies will have to have a higher degree of coverage. The minimum level of coverage these drivers need is now $50,000 per person injured in a car accident, $100,000 to cover each accident, and $25,000 to cover property damage per accident. Drivers must also have $1 million in auto insurance coverage when they are transporting a passenger. Coverage must be active when a driver is logged into their employer’s mobile application.
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Uber and Lyft already provide appropriate coverage for their drivers
The Insurance Council of Texas suggests that the new law will ensure the safety of both drivers and passengers. Notably, however, both Uber and Lyft already provide auto insurance coverage that complies with the new law. As such, the companies will have to do little to ensure they can continue to operate in the state. They will, of course, need to ensure that the insurance coverage they provide is active at all times and not only when their drivers are transporting passengers.
Companies have shown support for modest changes in auto insurance standards
Uber, Lyft, and other ride share companies have come under fire recently due to their auto insurance policies. These companies had shown resistance to changes in insurance requirements in several states, which lead to these changes becoming more modest. Now, these companies have shown support for new auto insurance standards, which do not seem to be placing the companies under any significant pressure.