Uber and Lyft drivers have new insurance option
News: 2016 Press Release
SACRAMENTO, Calif. — Transportation Network Company (TNC) drivers have a new ride-hailing liability insurance option covering Period 1, with the option to add additional coverages. State Farm's new product, approved by Insurance Commissioner Dave Jones, is available beginning March 21, 2016.
"More insurers are stepping up to meet the changing needs of California's sharing economy," said Commissioner Jones. "State Farm has created a product that closes the gap in insurance coverage and helps protect drivers, passengers and pedestrians when ride-hailing vehicles are on the road."
State Farm's new endorsement allows a TNC driver to have their personal auto policy fill in the insurance gaps left by TNC-provided coverage. The new product provides liability coverage in Period 1, which begins when a driver turns on the ride-hailing application and is waiting for a match. State Farm's policy also keeps in force during Period 1 optional coverages that the driver purchased, such as medical payments, comprehensive, collision, rental reimbursement and towing. Additionally it provides the driver with all other coverages applicable to his/her auto policy during all periods of TNC driving.
Commissioner 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 AB2293.
Commissioner Jones encouraged insurers to develop auto insurance products for TNC drivers. Jones directed the Department of Insurance to begin accepting ride-hailing 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.
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AB 2293 (Bonilla), which took effect on July 1 of last year, requires TNCs to provide liability coverage or make sure drivers have liability coverage during all periods the TNC application is on. AB 2293 does not require TNCs to provide collision or comprehensive auto insurance for drivers.
The California Department of Insurance, established in 1868, is the largest consumer protection agency in California. Insurers collect $310 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 website at www.insurance.ca.gov. Non-media inquiries should be directed to the Consumer Hotline at 800.927.4357. Telecommunications Devices for the Deaf (TDD), please dial 800.482.4833.