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Insurance commissioner approves new USAA insurance product to fill gap for its ridesharing drivers

News: 2016 Press Release

For Release: January 21, 2016
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Insurance commissioner approves new USAA insurance product to fill gap for its ridesharing drivers
USAA meets insurance need driven by new technology fueling ridesharing companies like Uber and Lyft

SACRAMENTO, Calif. — Ridesharing companies are continuing to increase in popularity as Uber alone has surpassed 1 billion total rides since its inception. Insurance Commissioner Dave Jones announced today that he has approved a new insurance product by USAA that close the gap in insurance coverage for drivers driving for all ridesharing companies.The product is now available to USAA's California drivers for all ridesharing companies, such as Uber and Lyft.

"Closing the insurance gaps in ridesharing coverage is crucial to making sure passengers, other drivers and pedestrians are protected when ridesharing vehicles are on the road," said Commissioner Jones. "I am pleased to see USAA offer a product that closes the coverage gap and helps protect California's consumers."

The new product provides liability coverage in Period 1, which begins when a driver turns on the rideshare application and is waiting for a match. Importantly, USAA's policy also keeps in force during Period 1 optional coverages that the driver has an option to purchase, such as medical payments, comprehensive, collision, rental, tow, and uninsured/underinsured motorist.

This new product is available to all drivers for Transportation Network Companies (TNCs), and adding this coverage to a driver's existing policy will add seven percent to their premium.

"Our ridesharing insurance is a great example of our commitment to providing protection where our members need it most," said Jesse Mata, USAA product management director."Being in an accident before they are matched with a passenger could be devastating to ridesharing drivers' finances if they don't have the appropriate coverage."

Commissioner Jones has been a national leader in encouraging innovation in the insurance marketplace, most recently in response to the emergence and popularity of ridesharing or TNCs in California. Jones identified insurance coverage issues associated with the ridesharing model early and issued a set of strong recommendations which were included in rules issued by the Public Utilities Commission and in AB 2293 (Bonilla). AB2293, 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.

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.

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Media Notes:

  • USAA infographic: How rideshare gap protection works
  • 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.
  • USAA's minimum required liability limit amounts for ridesharing services are $50,000 per person, $100,000 per accident and $50,000 for property, which are slightly higher than the 50/100/30 limits required by AB 2293 for Period 1.

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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