Have you ever wondered why you are seeing more cars with giant pink mustaches on their front bumper? No, it is not simply a new trend. Those people with the pink mustachioed cars are drivers for Lyft. Lyft, along with UberX, as well as a few other businesses, are ‘transportation network companies’ that use online platforms to connect passengers with drivers using personal vehicles. These companies offer people the chance to hitch a ride with drivers who are willing to go wherever necessary. The apps involved not only match a driver to your needs, but the cost is typically around 30 percent less than hiring a traditional cab.
Gaps in Insurance Coverage
While Transportation Network Companies are required to maintain liability insurance, they do have to cover medical payments and collision costs, though do not have to cover against uninsured or underinsured motorists. These types of coverage are all optional, leaving many drivers that work for Transportation Network Companies needing to personally pay for any car damages from underinsured or uninsured drivers, as well as for injuries they may suffer in an accident. In addition to this, drivers who work for these companies may lose their personal insurance policies if they try to make a claim related to a ride-share.
Massachusetts is still relatively new to ridesharing services, and in August of 2012 the Massachusetts’ Division of Standards sought to shut Uber down. Later, however, the office backed away from that plan, and Lyft, Uber, SideCar, and others have been growing in popularity in Boston ever since. That said, Governor Patrick’s office is still wrestling with how to protect drivers that work for rideshare companies.
The Department of Insurance in California has put out a notice, warning people that they may lose coverage and may not have coverage in certain incidents involving a car accident. For example, one UberX driver was excluded from Uber’s insurance coverage, even though he was out to pick up passengers already.
In response to the insurance troubles rideshare drivers have been facing, Lyft recently announced it is giving additional insurance for drivers. Lyft now offers collision insurance with a $50,000 maximum, $1 million worth of coverage if a driver is hit by an uninsured motorist who is at fault, and $1 million worth of coverage if a driver is hit by an underinsured motorist who is at fault.
Lyft has also joined the Peer to Peer Rideshare Insurance Coalition to collaborate with other new businesses on how the insurance industry can adjust to match the growing demand for online ridesharing programs.
Ridesharing is a great way to cut down the costs of getting to where you want to go. With new technology continuing to develop that matches the needs and wants of users around the world, companies like Lyft and Uber are only going to continue to grow. Still, driving without being fully insured can be dangerous and costly. If you would like to know more information on insurance with transportation network companies in Massachusetts, or if you believe you may have a claim with regard to a rideshare program, contact John J. Sheehan at 877-762-9510 today.
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