ISO Introduces Endorsements to Address Ridesharing Policy Gaps

April 2, 2015

ISO has introduced two new personal auto coverage options for ridesharing drivers when they’re logged in but don’t have any passengers – an issue that has been the subject of controversy among insurance companies and those outside the ridesharing community.

The endorsements provide two options for personal auto insurers to offer coverage to drivers participating in ridesharing services or transportation network companies (TNCs). One coverage option would apply from the time the drivers log in to the TNC platform via a mobile device until they’ve accepted a ride request. The other would apply from when they log in to the TNC platform up until a passenger occupies their vehicle.

“Personal insurers may want to provide coverage options to ridesharing drivers without requiring them to buy a commercial auto policy,” said Beth Fitzgerald, president of ISO Insurance Programs and Analytic Services. “Our new endorsements will allow insurers to easily add ride-sharing coverage for TNC drivers to their customers’ personal auto policies.”

ISO said it began filing these endorsements recently on a multistate basis, along with rating rules and relativities for insurers to help price the two coverage options under a personal auto policy.

“As ridesharing is still a relatively new issue in insurance, it may be difficult for carriers to identify and rate the risks of ridesharing drivers,” said Patrick Woods, vice president of Actuarial Products and Operations at ISO. “Our rating tools are designed to help them offer coverage that specifically addresses each driver’s individual risk profile.”

According to a recent white paper by the National Association of Insurance Companies, insurance companies have been increasingly under pressure to offer coverage for ridesharing companies. State insurance regulators are helping state legislators consider how to best address the insurance gaps associated with TNCs. Legislation is also currently pending in at least 35 states.

The NAIC paper, Transportation Network Company Insurance Principles for Legislators and Regulators, says policy endorsements are being developed specifically for personal auto providers to close gaps for TNC drivers willing to purchase them. ISO’s new endorsements may fall into this category.

Several companies are now offering coverage options in certain states, but each policy addresses different issues facing ridesharing drivers:

R Street Institute has also reported that major insurers are ready to strike a deal to support transportation network companies’ compromise language.

ISO, a Verisk Analytics business, provides statistical, actuarial, underwriting, and claims information and analytics.

Latest Comments

  • April 6, 2015 at 1:34 pm
    KY jw says:
    That will probably depend on how courts decide the employee/contractor issue. TNCs say the drivers are not employees. Which seems reasonable since these drivers often drive fo... read more
  • April 2, 2015 at 3:05 pm
    insurance_guy says:
    I wonder how workers comp works for these TNC drivers?
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