As the vacation travel season gets underway, Pennsylvania’s insurance department is reminding consumers to understand their personal auto insurance policies before participating with any of the new ridesharing services.
“With the recent rise in Transportation Network Companies, or TNCs, which connect passengers with drivers through an online or mobile phone application, consumers may be focused on the new innovation without understanding their liability or risk exposure,” said Pennsylvania’s Insurance Commissioner Mike Consedine.
“Learning too late of gaps in insurance coverage can have serious financial consequences for participants in these programs,” Commissioner Consedine said.
Personal auto insurance policies typically exclude coverage while the insured’s vehicle is being used in a ridesharing service, under what is commonly known as a public livery exclusion.
While some TNCs may purchase coverage for their network of drivers, this insurance may not cover all costs in the case of an accident, the regulator said.
The insurance department is offering the following tips for consumers who wish to participate in these programs:
• Consumers should check their own personal auto insurance policy, and make sure to see a copy of any commercial insurance policy held by the TNC to protect its drivers.
• Consumers should contact their insurance agent, broker or company to identify potential gaps in their personal automobile insurance policy and the TNC’s policy. Let the insurance company know of the intent to participate in the program.
• Make sure the commercial automobile insurance policy held by the TNC includes coverages required by law for medical benefits, bodily injury and property damage liability. Ask about the optional coverages for collision damage, or injuries caused by an uninsured or underinsured motorist.
• Be aware that any coverage to address these gaps should include the period before, and during, the times when the participant is designated to drive passengers.
• Be certain to understand which insurance policy (the personal auto or TNC commercial) provides what coverage and when that coverage is triggered.
Consumers should also be aware that certain ridesharing services or TNCs currently have commercial applications pending with the Pennsylvania Public Utility Commission. Consumers with questions on any of these applications can search for relevant documents on www.puc.pa.gov.
Traditional car-pooling or ridesharing arrangements in which friends, neighbors or co-workers share driving duties and the cost of gasoline are not considered commercial-type activities. These types of arrangements are typically covered by personal auto insurance policies.
Source: The Pennsylvania Insurance Department
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