Skip to main content

Alert: 'Unacceptable gaps' in insurance with some car-sharing services

  • Author:
  • Updated:

The Minnesota Department of Commerce on Thursday issued a consumer alert to warn riders about car-sharing services that might leave users uncovered in the event of a car accident.

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.

Next Up


Sheriff: Search for 3 kids at Vadnais Lake is 'likely triple homicide'

"A horrible set of facts appears to be developing," said Sheriff Bob Fletcher.

Pixabay laptop keyboard phone dark

Charges: Duluth man had hundreds of child porn images, videos

The National Center for Missing and Exploited Children found nearly 330 images on the man's electronic devices.

hennepin county sheriff water patrol lake minnetonka

Scuba diver found dead in Lake Minnetonka identified as 20-year-old

The Hennepin County Medical Examiner's Office said 20-year-old Brady Alan Aune, from Elko New Market, died of freshwater drowning on June 3.

Screen Shot 2022-06-30 at 11.18.35 AM

Felony charges filed after authorities search 'Peacebunny Cottage'

The president of the rabbit rescue non-profit faces multiple animal cruelty charges after over 40 rabbits were found dead inside the organization's barn.

monkeypox virus

Minnesota up to 6 confirmed cases of monkeypox virus

Most people recover at home within 2-4 weeks.

thc edibles

Did Minnesota just accidentally legalize THC?

A Republican lawmaker who voted to approve the new law in May is already talking about rolling it back.

Screen Shot 2022-06-30 at 3.19.42 PM

Gasoline may be cause of sewer explosion on U of M campus

An all-clear was given around 9 p.m. Thursday, with residents in the area allowed to return to their homes.


Overwhelming demand for THC products on first day of new law in MN

One shop owner said his Chaska store broke the online sales record before they opened Friday morning.

Flickr - Lake Minnetonka boat - Greg Gjerdingen

Increased drunk boating enforcement over 4th of July weekend

The increased enforcement is part of the Operation Dry Water initiative.


Four kayakers stranded, rescued in Chisholm park

The kayakers became stranded at Redhead Mountain Bike Park Thursday afternoon.


Duo charged after 10-pound meth package sent to wrong address

More than 10 pounds of meth are off the street thanks to a delivery error.

Screen Shot 2022-07-01 at 11.01.32 AM

Bird Rides' suburban expansion continues in Minnesota

Its scooter season in Minnesota. The latest on where you can find Bird e-scooters: