New ride-hailing coverage approved by Insurance Commissioner for Mercury Insurance
News: 2016 Press Release
SACRAMENTO, Calif. — Insurance Commissioner Dave Jones announced today that he has approved a new insurance product that provides increased access to insurance coverage for drivers driving for Transportation Network Companies (TNCs). The product, offered by Mercury Insurance, is available to drivers for all ride-hailing companies, such as Uber and Lyft.
"As demand for ride-hailing services continue to increase, making sure drivers are able to obtain insurance to protect themselves, their passengers and pedestrians is a top priority," said Commissioner Jones. "We are pleased to see Mercury Insurance, one of the state's largest insurers, offer this type of coverage."
Commissioner Jones has encouraged insurers to develop auto insurance products for TNC drivers. In the past, ride-hailing drivers have been left without coverage by their insurance companies if they got into an accident during Period 1 while their ride-hailing app was on. Mercury's new coverage will close that gap and provide drivers with access to coverage throughout the entire ride cycle. Previously, drivers were only covered by TNC commercial insurance once they accepted a ride.
"Mercury has been protecting drivers for more than 50 years. It's what we do. So, we're very excited to be one of the first companies to extend the coverage to ride-hailing drivers and protect not only them, but the drivers and families with which they come in contact on the road," said Jim Reeves, Mercury's research and development group manager.
Mercury policyholders may purchase this new endorsement for an additional 13 percent of premium for bodily injury, 17 percent for property damage, 5 percent to medical payments premium if medical payment coverage is chosen and 5 percent to collision premium if collision coverage is chosen.
Jones has been a leader in encouraging innovation in the insurance marketplace, most recently in response to the emerging sharing economy and the growing popularity of TNCs in California. Jones identified insurance coverage issues associated with the ride-hailing model, and issued a set of strong recommendations which were included in rules issued by the Public Utilities Commission and in AB 2293.
Commissioner Jones encouraged insurers to develop auto insurance products for TNC drivers and directed the Department of Insurance to begin accepting ridesharing insurance product filings from insurers nine months before the new law went into effect. To date the department has approved eight insurance products covering TNCs.
Currently, Mercury's ride-hailing insurance is only available to California, Arizona and Nevada ride-hail drivers.
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- Mercury Insurance: ride-hailing protection
- Transportation Network Company services generally fall into three periods:
- Period 1: App open - waiting for a match.
- Period 2: Match accepted - but passenger not yet picked up (driver is on his/her way to pick up the passenger).
- Period 3: Passenger in the vehicle and until the passenger exits the vehicle.
- AB 2293:
- Provides that the driver's personal auto policy provides no coverage from the moment the ridesharing app is turned on.
- Requires the TNC, the driver or some combination of the two to maintain primary liability insurance as follows:
- Period 1
- $50,000 for injury to a single person
- $100,000 for injury to multiple persons
- $30,000 for property damage
- Periods 2 and 3: $1 million
- TNCs must also maintain $200,000 in excess insurance during Period 1.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $289 billion in premiums annually in California. Since 2011 the California Department of Insurance received more than 1,000,000 calls from consumers and helped recover over $469 million in claims and premiums. Please visit the Department of Insurance web site at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.HELP or 213.897.8921. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.