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Uber and Lyft drivers have new insurance option

News: 2016 Press Release

For Release: January 19, 2016
Media Calls Only: 916-492-3566
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Uber and Lyft drivers have new insurance option
Commissioner approves new Transportation Network Company coverage from State Farm

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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Media Notes:

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.

Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.

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