Drive for Lyft or Uber? Better check with your insurer

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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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Copyright 2017 KPHO/KTVK (KPHO Broadcasting Corporation). All rights reserved.


Dave CherryCBS 5 Advocate Dave Cherry works to resolve your consumer problems and protect your money. If he can't help, he'll do his best to point you in the right direction.

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Dave Cherry
CBS 5 Advocate

Dave was born and raised in Philadelphia and considers himself one of the biggest Philly sports fans. At 6-feet, 5-inches, he's probably right! Dave started on a different career path before fulfilling his lifelong dream of reporting the news and helping consumers. Dave graduated from Philadelphia University with a Bachelor of Science degree in Accounting; he later earned an MBA degree in Finance from Temple University in Philadelphia. Dave also spent ten years as Vice President and Director of Sales and Marketing for two of America's leading real estate franchise companies. Dave started his 21-year news career at WHP in Harrisburg, Pennsylvania, as news anchor and reporter, then moved to KOLD in Tucson, as the morning news anchor. From Tucson, he went to KRON in San Francisco as a freelance news reporter before moving east to COMCAST in Philadelphia as a general assignment reporter. In the fall of 2003, Dave moved west and joined KPNX in Phoenix and spent nine years as the station Call for Action Consumer Reporter. Through his on-air advocacy work in 2011, Dave and his team were able to help consumers save more than $1 million. Dave joined CBS 5 News as our CBS 5 Advocate in December 2012. Dave is a vegan and likes to eat the amazing vegan food prepared by his lovely wife, Carmen. Dave's also a big Bruce Springsteen fan (he's seen more than 70 shows!), the man who inspired him to learn the guitar. Besides playing many of the boss' songs, Dave writes and sings his own songs and recorded a CD of original music.

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