California Bill Allows Commercial Insurance for Uber Drivers
Uber and Lyft are fairly well-known alternatives to taking a taxi, allowing people to simply contact other people via a smartphone app to hitch a ride for a small fee. In some cities, Uber and Lyft are becoming more popular than yellow cabs, gathering more customers and drivers by the day as city-dwellers in need of transportation gravitate toward more comfortable, personal, and affordable options like Uber and Lyft.
Uber recently received a boost in popularity in Toronto as high-profile EDM producer Deadmau5 joined the fleet of drivers for a night, surprising Uber users with a celebrity escort in a gorgeous McLaren 650S. With viral celebrity endorsements like this, it’s surprising that drivers for Uber and Lyft have been unable to get commercial auto insurance, but that may soon change with the passing of a new bill.
The bill, AB2293, passed in California during the last week of August, and if it’s allowed to take effect, it could pave the way for a new era of protection for services like Uber and Lyft. It will allow Lyft and Uber drivers to get car insurance on their vehicle for both personal and commercial use.
This new bill has seen support from not only Uber and Lyft, but from the insurance industry as a whole, thanks to a recent change in the bill’s stipulations lowering the minimum amount of coverage required. The legislation clearly calls for a development of a hybrid insurance policy for drivers that covers both personal use of their vehicle and the use of it in TNC (Transportation Network Company) work. The state Department of Insurance has been instructed to expedite the approval of these products to insure that applications don’t face delays or interruptions.
This marks the end of many Uber and Lyft drivers living in fear of their car insurance companies. Many prefer not to be identified by name for fear that their own car insurance companies would cancel their personal policies after finding out about the commercial use of their vehicle. The policies were written before these crowdsourced cab services existed, and many insurance providers will refuse service to drivers for Uber.
Mass cancellations never occurred, but judging by the reported incidents of cancellations occurring to drivers who weren’t careful, it’s reasonable for these drivers to keep their car’s nightlife a secret. The same goes for these drivers attempting to get commercial insurance. Most commercial auto insurance companies don’t have policies in place for TNC drivers.
The policy itself is a complicated ordeal, but suffice it to say that the policy that bill AB2293 hopes to alleviate all of the previously recounted concerns and legitimize the TNC industry as a whole. Several insurance providers have already been in talks with Uber and Lyft to provide hybrid insurance plans for their drivers, and at this point in the process, it seems like only a matter of time until these services, and citizens serving as freelance taxi drivers, are able to make their way and, just maybe, give taxis a run for their money.
Do you have any experience with these services? Feel free to tell us about the experience in the comments section below, as well as your thoughts on how these companies’ drivers should be insured.
