Ridesharing And Impact On Auto Insurance In Massachusetts

ride sharing insurance in medford massachusetts

As more Massachusetts drivers sign on to drive for ridesharing companies, like Uber and Lyft, the state and the companies insuring those drivers, remind people to know the limitations and coverages of their auto insurance policies.

In response to the growth of transportation network companies, as of this month, MAPFRE, the largest private passenger automobile insurer in Massachusetts, has begun offering a new ridesharing endorsement for ridesharing drivers. The endorsement offers ridesharing drivers some extra coverage when the driver is waiting in a standby period for a transportation network company.

Under law, the transportation network companies must provide the network drivers, who are logged into the company’s digital network while available to receive transportation requests, the following insurance:

  • $50,000 of coverage per person for bodily injury,
  • $100,000 of total coverage for bodily injury,
  • $30,000 of coverage for property damage,
  • Uninsured motorist coverage of at least $20,000 per person and $40,000 per accident and
  • Personal injury protection of at least $8,000 per insured person.

“Basically the ridesharing endorsement adds back coverage during the standby period for collision and comprehensive,” says Daniel Bates, a certified agent at Bates Insurance Agency. “Right now transportation network companies don’t have any obligation or incentive to offer those kinds of coverage to drivers during their standby period. If someone doesn’t have the endorsement, the Rideshare Exclusion that is part of personal auto policies, would void collision and comprehensive coverage when these drivers are in a standby period.”

This is particularly important for transportation network drivers with auto loans requiring collision and comprehensive coverage. Whenever a ridesharing endorsement is available to them, it is legally required for them to add it, Bates says.

As for the cost of the rideshare endorsement, currently MAPFRE charges an additional premium equal to seven percent of the vehicle’s insurance premium, excluding any additional premiums for substitute transportation and towing.

How does it work?

As soon as a ridesharing driver activates the app to login to a transportation network company, their personal auto policy’s rideshare exclusion applies.

“What people need to understand, is that as soon as they log in, there is no longer any coverage under that driver’s personal auto policy for anything that happens to that vehicle,” Bates says. “In fact, when the driver accepts an assignment from the company to pick up a passenger or package, or transport a passenger or package, both the rideshare exclusion and the endorsement will exclude coverage.”

The transportation network driver, however, will have at least the mandatory liability limits offered by the company’s insurance of:

  • $1,000,000 in per occurrence, per vehicle coverage for death, bodily injury and property damage,
  • Uninsured motorist coverage of at least $20,000 per person and $40,000 per accident and
  • Personal injury protection of at least $8,000 per insured person.

“As more people consider becoming drivers for these companies, they just need to know what their auto insurance and the ridesharing company’s insurance are covering and are not covering,” Bates says. “If they have any questions, they should always consult their local insurance agent.”

INSURANCE AUTO RIDE SHARING