Wednesday, 02 March 2016 19:40

ASA Announces First Car Insurance Policy for Lyft Drivers in California

Dave Jones, California insurance commissioner, approved the first policy for Lyft drivers with a passenger in the vehicle. The policy covers drivers who work for Lyft and are carrying a passenger in their vehicle. The decision could pave the way for other states to follow suit and increase the options of coverage for those who drive for companies like Uber and Lyft.

The policy specifically covers a driver who has accepted a passenger or picked them up, which was a period only covered by the company before. Drivers in California must have coverage at all times when they are working for app-based ride booking companies like Lyft and Uber. California law, like many other states, requires the driver to be insured but doesn’t state who must pay for the insurance. It can be provided by the driver or the company or by both.

What this approval means is that more states will follow suit and allow insurance providers to create products focused specifically on those who drive for companies like Lyft. Currently, Lyft provides coverage for their drivers with a $1 million liability policy that is in effect from the acceptance of a ride until it ends. In addition, a contingent policy worth $100,000 is offered for times when the app is on but the driver doesn’t have a passenger or an acceptance. It is only needed if the driver’s insurance won’t cover an accident.

Creed Anderson of ASA Insurance providing car insurance in Salt Lake City, is glad to see the change. "It gives more options to people who are driving for these companies," he says. "They are in control of the coverage they have and can better protect themselves by knowing how much coverage they have."

There have already been incidents involving drivers for these companies and navigating the process with the insurance providers can be challenging and confusing. The difficulty is not only for other parties but for the driver who may worry about who will pay for the claim. Having their own insurance policy specifically designed for this situation can provide peace of mind. While the companies have improved their coverage due to previous accidents, they are not always enough.

Another issue is that many insurance policies won’t cover accidents that result when the person is using his or her vehicle for work. There may be times that the person is not covered by the company’s insurance or their own, but they are unaware of it. Choosing a policy that specifically addresses this type of situation will help ensure adequate coverage for the driver.

Anderson advises drivers to review their coverage with their own insurance provider and with the company before taking a job. This gives them time to ask questions and ensure they are covered not only for expenses of hurting someone else but for their own injuries. The time to find out the limitations of their insurance is before an accident happens. Anyone looking for car insurance in Salt Lake City who will be driving for one of these companies should take the time to make sure they have adequate coverage.

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