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Insurance Changes for Uber, Sidecar and Lyft

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Insurance Changes for Uber, Sidecar and Lyft

I’m Mary Martin with an update on the new Texas insurance requirements for transportation drivers effective January of 2016. These laws affect insurance requirements for transportation network company drivers such as Uber, Sidecar and Lyft.

In 2013, a lawsuit was filed in San Francisco regarding a 6-year-old who was killed and her mother and brother injured by an Uber driver searching for a rider on on New Year’s Eve. While that case ultimately settled, the insurance coverage was at issue – who would pay for the civil damages awarded. Uber claimed that because the driver had no rider at that time, Uber was not financially responsible for that accident. Instead, Uber argued that the driver’s personal policy should be the sole coverage.

Texas passed a new law to solve this issue; effective January 1, 2016, all transportation network companies and their drivers need additional coverage when the ride hailing app is on – even if no one else is in the car. This puts the same requirements upon these services as taxi services currently follow. The guidelines of this new law are found in Chapter 1954 to the Texas Insurance Code.

The basic minimum liability coverage for Texas drivers is 30/60/25. That means you are covered for $30,000.00 per person injured in a wreck, up to a total of $60,000.00 per accident and $25,000.00 in property damage per accident.

The law that went into effect in January for transportation network drivers requires 50/100/25 coverage (when the app is on WITHOUT a rider and an aggregate $1 million in coverage when there IS a rider.

Notably, the law provides that if the driver allows his/her insurance to lapse or has insufficient coverage, the transportation network company must provide the required coverage beginning with the first dollar of a claim against the driver. In addition, transportation network companies must disclose their insurance coverage and the limits of liability of participating drivers.

Companies such as Uber and Lyft have reportedly already provided drivers with commercial liability insurance up to the required $1 million.

Moreover, some insurance companies now offer end-to-end insurance coverage to Texas drivers to cover vehicles for personal use, ride-sharing and other on-demand services.

There may be more changes as the legislature convenes in 2017. We will continue to keep on top of the changes.