SAN ANTONIO – Despite some new protection, rideshare drivers still need to be aware of their blind spot when it comes to insurance Jan. 1.
A state law going into effect in 2016 gives rideshare drivers some guaranteed protection when it comes to insurance claims. The new law requires either the driver or the ridesharing company to carry certain levels of liability insurance. It applies to both when the driver is just on the app, waiting for a fare and when the driver is matched with or is transporting a rider.
Additionally, the rideshare company has to cover claims against its driver if the driver's own car insurance doesn't because of insufficient or lapsed coverage. The law is meant to deal with cases when a driver's insurance might deny a claim because he or she was driving for a rideshare company.
While Uber's and Lyft's policies already reflect the law, the bill's author Texas State House Rep. John Smithee says there are plenty of smaller ride-share companies out there.
"And what we wanted to make sure is that no matter whether it's a national company or a local company that we don't have drivers on the road that don't have insurance," said Smithee
However, the law doesn't require collision coverage, which is what a driver who is at fault in an accident could really use. Liability insurance pays for damage the driver causes to other people and their property. Collision coverage pays for the driver's own damage, at fault or not.
Uber and Lyft provide some collision coverage when a driver is getting a rider or has one in the car, but there's none when the driver is just logged onto the app but not matched with a rider.
"You know, I think that most drivers just expect to be covered for collision during Period 1, and that's when you start running into issues during that Period 1," said Harry Campbell, the founder of The Rideshare Guy blog.
Campbell says that gap means drivers could end up paying for their car's damage.
"I guess I would surmise that honestly a lot of drivers are probably getting into accidents during Period 1 and just telling their personal insurance that they weren't driving for Uber or Lyft," he said.
Some insurance providers are beginning to offer policies to fill in that gap. USAA and Geico have both unveiled insurance policies tailored for Texas rideshare drivers.
"So the gap product allows members to carry over the specific coverages from their policy to that gap phase," said Jesse Mata, a product development manager at USAA.
The Defenders asked the Texas Department of Insurance how many insurance companies offered ride-sharing insurance policies.
TDI spokesman Jerry Hagins said "As of December 21, 2015, TDI has approved policy form filings for personal auto insurance from nine insurers that provide coverage for ridesharing or car-sharing:"
- Allstate Fire and Casualty Insurance Company
- Farmers Texas County Mutual Insurance Company
- Garrison Property and Casualty Insurance Company
- Metropolitan Lloyd's Insurance Company of Texas
- State Farm County Mutual Insurance Company of Texas
- State Farm Mutual Insurance Company
- United States Automobile Association
- USAA Casualty Insurance Company
- USAA General Indemnity Company