Insurance Doesn't Always Cover Rideshare Drivers

Posted at 9:31 PM, Apr 05, 2017
and last updated 2017-04-07 15:41:00-04

A Lyft driver who was a victim of a hit-and-run has recently found herself in a complicated situation after no one would cover the cost to repair the damage.

Joy Austin had been a driver for the ridesharing app for only two weeks before she claimed a driver sideswiped her and kept on going on Main Street in east Nashville.

"I said I've been hit and my second thought was 'where did the guy go?'" Austin told NewsChannel 5. 

Her insurance company denied her claim because she was technically "logged on" to the app and was waiting for a customer request. 

In Tennessee, drivers who work for Uber or Lyft, which has been identified as a Transportation Network Company (TNC), must have their own primary auto coverage. If there is an accident and the driver does not have coverage, the company is required to provide coverage and has a duty to defend the claim. 

However, not all insurance companies cover TNC drivers, even if they have auto insurance.

According to the Tennessee Department of Commerce and Insurance, the state permits an insurer offering personal auto to expressly exclude coverage during times an insured is acting as a TNC driver under the terms of the policy, and the exclusion alleviates the insurance company from a duty to defend or pay any claim.

"I never missed a payment at all," Austin said. "I paid every single month my insurance and they won't cover me even though it wasn't my fault."

Like several other companies, Austin's provider offers rideshare insurance but she was not aware of the option.

Lyft also denied her claim because she was under the contingency liability coverage. 

The contingency liability coverage is designed to cover when the app is in the driver mode even before the ride request. The policy is a safe bet for drivers if they were at fault.

In Austin's case, she was the victim.

Lyft does have collision coverage as long as the driver has collision coverage on their personal policy. It also applies once a ride has been requested up until when the passenger has been dropped off. 

Ausin fears she will have to take a loan to cover the $3,500 repair. She cannot ride for Lyft until the repairs have been fixed which she said has been affecting her finances.

"To me that's a loss of a thousand dollars, 500 dollars a week, that's a lot of income to lose," Austin said.

TNC drivers should carefully discuss with their insurers rideshare insurance and what exactly is being covered.

To learn more about the state's regulations, click on this link.