Drive for Lyft or Uber? Better check with your insurer

Posted: Updated:
PHOENIX (3TV/CBS 5) -

If you're an Uber or Lyft driver your personal auto insurance policy may need an upgrade if you plan to continue working in the rideshare industry.

Most insurers allow you to drive for Uber or Lyft but to be fully covered you may be required to pay for an addendum to your policy which may be expensive. But a Phoenix man says two insurers didn't want him as a customer after they found out he was a rideshare driver.

Five months after Charles Dickerson started driving for Lyft, when his personal auto policy with AAA was up for renewal, he casually mentioned to AAA that he used his car for ridesharing. He says AAA immediately made their position clear.

"If you drive for Uber or Lyft, we will cancel your policy if we find out," Dickerson said.

Sure enough, AAA refused to renew his policy. Dickerson then got approved by Progressive but the insurer canceled just days later after they found out he drove for Lyft stating "commercial use of his car was unacceptable." Dickerson says rideshare drivers should be concerned.

"Their personal coverage is in jeopardy when they're driving for Lyft or Uber and I think that they have no clue that is the case," Dickerson said.

Some insurers offer an option that allows rideshare drivers to keep their personal policy. Dickerson says he got quotes from two major carriers.

"They were 2-3 times more expensive than the policy I have if I decide not to drive for Lyft," Dickerson said.

Dickerson says Lyft never discussed with him the risk he could lose his personal auto policy if his insurer found out he drove for them. He was caught completely by surprised.

"That there are thousands of drivers out there that are at risk on their personal policies and they don't know it," Dickerson said.

CBS 5 News spoke with AAA and, at the time of this report, it is still unclear how they handle rideshare drivers. Therefore, AAA customers should be cautious about discussing the matter. If we receive a definitive response from AAA, we will update this report.

A Progressive spokesperson told CBS 5 News that the company will be offering a new endorsement any day now (early September 2017) that will allow rideshare drivers to keep their personal auto policies. However, Dickerson says he called a Progressive agent on September 6, 2017 and the Progressive agent didn't know anything about this policy enhancement. We will also let you know if this endorsement is truly instituted.

Here is a list of major insurers that allow rideshare driving on a personal auto policy with a paid addendum/endorsement.

  • Farmer's
  • Liberty Mutual (endorsements offered through Safeco)
  • Allstate
  • State Farm

Here is a statement from Lyft regarding how they discuss insurance issues with their drivers:

"We know that insurance is an important consideration for those driving for Lyft. Before individuals are approved to drive on the Lyft platform, we advise them to check with their personal insurance agent on what is covered in regards to TNC activities. We are aware of multiple insurers in the Phoenix area that provide solutions specific to TNC drivers. We encourage any drivers with concerns to contact their insurer or Lyft’s support line."

 

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