How Does Auto Insurance Factor into Driving Services Like Uber?

Driving Services Insurance in San Diego, CA

New waves of transportation options are changing the way the auto insurance industry handles claims. You may want to think twice before you sign yourself up for Uber, UberX, Lyft, Sidecar, or another driving service because of how it potentially affects your insurance.

Anyone with a smartphone can sign up and start driving for some extra cash with these new driving services. However, this can be problematic because Uber and other driving service agencies do not actually provide cars and drivers. They are just virtual places for people to meet for ridesharing purposes, which means these agencies are not required to cover insurance for individual drivers.

On the other hand, commercial transportation agencies like Yellow Cab are required to carry auto insurance in San Diego when a driver uses the car for business purposes or otherwise charges for driving services. However, individual drivers for Uber are often unaware they are not covered when they are in an accident while participating in ridesharing. These issues arise when any type of auto accident happens that requires a claim.

A grey area occurs because Uber and other ridesharing services are not clearly defined in the transportation industry. Classification in the industry has much to do with Uber drivers’ payment differing from the way traditional driving services are paid. This means rideshare services are not covered under either commercial insurance in San Diego or individual coverage.

When individual claims are made while participating in ridesharing, auto insurance agencies typically deny them. Meanwhile, Uber and other rideshare agencies are not required to provide commercial-level vehicle insurance for drivers participating in their services. However, some insurance agencies are starting to incorporate policies to accommodate these exceptions, which means changes may be on the horizon.

Whether you need cheap car insurance in San Diego to provide driving services or just need it for your own personal use, get in touch with American Tri-Star Insurance in San Diego. Call 619-272-2100 and one of our friendly agents would be happy to help you find the right insurance for your needs.