Auto insurance for rideshare vehicles: key information

Articles,Firm News On Wednesday, October 10, 2018

People in Connecticut should understand that ride-sharing has different insurance rules than normal driving, and know how this affects them.

Anyone living in Connecticut who uses ride-share services can see the similarities with taxi and livery services. One thing that may never cross the mind of someone using one of these services is whether or not their driver is insured. People may be wondering what kind of insurance is required of operators of ride-share vehicles, or if it is even possible that their vehicle operator could be driving around without insurance. What would happen ifan accident occurred while getting a ride through one of these services? While the laws for ride-share vehicles are still in development, there have been some basic regulations laid out in the state of Connecticut for these kinds of vehicle uses.

What is the difficulty?

Some people may be wondering why rideshare drivers can’t just use their normal auto-insurance policy to cover their vehicles. The short answer to this question is that insurance companies are still trying to figure out how the specific risks involved with ride-sharing can be underwritten. To go into more depth, it can be thought about like this: When a person signs their vehicle on to an insurance policy, the policy is intended to cover that specific person and their personal use of the vehicle signed to the policy. Using a vehicle for ride-sharing goes beyond personal use, as the vehicle is now being used to transport the public rather than to just get one person around. This type of insurance policy should cover what happens in case someonegets injured while riding as a passenger.

What type of coverage is needed?

Ride-sharing businesses are also known as Transportation Network Companies or TNCs. Drivers working for TNCs need to get commercial insurance coverage rather than just personal. The way personal auto-policies are designed does not expect that a person will be making any money from their trips, and that he or she will not be driving more than 10,000 miles. In order for a policy to be fully effective for a TNC driver, they must be able to get a policy that identifies their passengers as customers and identifies the use as commercial rather than personal.

What is unique to the State of Connecticut?

It was only last year, in 2017, that the State released an Act meant to regulate the insurance used by TNCs. The Act states that if using a surplus insurer, a ride-share driver must use one with a “A” rating from an agency that Insurance Department approves, though a rating of A- is allowed if it is from A.M. Best. The policy must also directly acknowledge that the holder is a TNC driver, and it must be the primary policy.

While there are now laws and regulations to guide people who are looking at ride-sharing insurance, a lot of them are still in development. Anyone who ends up injured in Connecticut may want to seek compensation, but this may not be easy with the insurance laws still in-progress. In this type of situation, an attorney in the local area who practices personal injury law may be able to help.

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