Ridesharing is an alternative to driving to work alone. It can include carpooling, vanpooling, walking, riding your bike, or public transit. The obvious benefit to people who rideshare is that it saves in gasoline. Certain companies sponsor ridesharing or give employee incentives to carpool. There are even businesses that work to connect people in ridesharing situations. However, what has been largely misunderstood is the position auto insurance takes on ridesharing.
When you buy insurance, the application often asks as to exactly what sort of driving you are doing. There are even places in the application that require identification as to whether there is an intention on your part to use your car in a ridesharing capacity. However, what often happens is that the insurance policy may be purchased at one time and subsequently, the insured becomes part of a ridesharing arrangement. Specifically, the insured may decide to work as a contractor for a ridesharing company. Thereafter, the insured innocently ends up in a situation where he is insured as a private vehicle, but unbeknownst to him, the insured changed his status and is now part of a rideshare.
Later, if an accident were to happen, and the driver or any passengers look to the insurance on the vehicle for coverage, it is possible that the insurance company will deny the claim if the insurance company learns that the reason these people were together in the vehicle was because of some sort of coordinated ridesharing carpool. Certain insurance companies have put out recent warnings defining ridesharing and alerting insureds to the fact that if they are involved in a ridesharing arrangement, they will need to notify the insurance company and there may be a premium adjustment.
If you are a driver in a ridesharing arrangement, this article should simply be a warning to you that you need to properly disclose to your insurance agent in writing that you are involved in a ridesharing arrangement, that you want to make sure that your insurance is on notice of that arrangement, and if there needs to be a slight adjustment in the premium, you are open to that as well. If you are a passenger in a ridesharing situation, what you need to do to protect yourself is to make sure you have sufficient levels of uninsured and underinsured motorist coverage on your own vehicle. If you are in an accident and somehow the driver’s insurance is voided on the vehicle in which you are a passenger then your own insurance on your own vehicle’s uninsured motorist coverage can step up and compensate you appropriately for your medical bills and injuries.