Is my car covered if I use it to provide taxi-like services?

driver holding cell phone out of car widowQ. Is my car covered if I use it to provide taxi-like services? I could supplement my income by giving people rides on my schedule, with the convenience of using my own vehicle. But will my insurance cover me? 

A. With the emergence of transportation network companies like Uber and Lyft, this question has become increasingly common.

The short answer is, your PEMCO policy does not cover this type of usage. In fact, virtually all personal lines auto policies exclude coverage for a vehicle "while it’s being used to transport persons or deliver property for compensation of any kind."

That language has been in the contract since well before these companies were founded, because the model for their business already exists: taxis. There's no doubt that the platforms created by companies like Uber and Lyft make it easier and more efficient for drivers and passengers to coordinate the ride. But the core use of the vehicle – getting from point A to point B with a paying passenger inside – really isn't much different from a traditional taxi.

If you want to jump into the evolving world of modern-day taxi services, my suggestion is to contact your local agent to discuss a commercial auto policy. Commercial policies can be customized to a business's needs and are the best-tailored product to protect you, your car, your riders, and the income you hope to make!

Jaime Layng

05/28/2015 05:16 PM

Excellent question, Christa! Your auto policy’s Personal Injury Protection (PIP) is the most likely source since it covers reasonable medical expenses arising out of injuries sustained in an auto accident. However, PIP coverage may not apply if you’re on company time while riding in the cab. For example, if you caught an Uber from your workplace to a restaurant for a lunch meeting, then your employer’s insurance could take precedence. Some expenses may be covered by a health insurance policy as well.

Christa

05/27/2015 03:53 PM

Great article! Curious, what does this mean for passengers who use companies like Uber and Lyft and the driver gets into an accident. Who pays for any medical emergencies?

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