The new options for transportation, such as Lyft and UberX, allow people to use their personal vehicles to offer customers rides. The Pioneer Press reported that these companies' auto insurance policies may leave drivers and passengers vulnerable.
The Business Journal explained the car-sharing companies don't have their own car fleets or drivers, but instead enable users with smartphones to oeprate as freelance drivers. Drivers' private insurance companies can object to covering a car if it's being used as a commercial vehicle.
The Commerce Department warns users to check their personal policies and those held by the car-sharing services. "Finding out after-the-fact that you have gaps in coverage can mean serious financial devastation,” Commerce Commissioner Mike Rothman said in the alert. “Take steps now, ahead of time, to ensure you have the coverage you need.”
The department reviewed a car-sharing company's insurance policy at the request of the city of Minneapolis, which is evaluating how to regulate the services.
"Upon review, it seems to the department that it is unclear whether (consumers) can rely on this product," spokeswoman Anne O'Connor said. "There are a lot of questions here."
The Pioneer Press reports that both Lyft and Uber said their commercial liability offers adequate protection. Lyft's commercial excess liability policy covers Lyft drivers "for bodily injury and/or property damage of passengers and/or third parties," Lyft spokeswoman Paige Thelen told the newspaper in an email.
The Star Tribune adds that the UberX commercial insurance interacts with personal policies held by users, supplementing a driver’s personal auto insurance or becoming the primary insurance if the personal insurance does not apply.
Kenny Tsai, UberX’s local general manager, said the company is seeking a meeting with the Commerce Department to review the issue. He said UberX’s coverage meets and exceeds Minnesota standards, and there is additional coverage that the department did not review.
“The coverage is excess to the driver’s own policy, but it acts as primary insurance if the driver’s policy is not available for any reason, covering from the first dollar,” Tsai said.