Rhode Island’s insurance regulators issued a consumer alert bulletin this week, highlighting insurance coverage issues and requirements surrounding ridesharing services.
“[R.I. Department of Business Regulation, Insurance Division,] issues this bulletin to highlight potential insurance implications for Rhode Island residents participating in for-hire transportation services, commonly referred to as ridesharing programs,” the consumer alert bulletin states.
“These operations typically provide pre-arranged transportation services for compensation using an online-enabled platform to connect passengers with drivers using the driver’s personal vehicle,” according to the bulletin. “These operations include companies such as Lyft, UberX, and Sidecar.”
While the programs vary, the potential gaps in insurance coverage for both drivers and passengers are concerning, the bulletin said.
In Rhode Island, for-hire transportation services are regulated by the Division of Public Utilities and Carriers (DPUC), under R.I. Gen. Laws § 39-14.1, Public Motor Vehicles.
Operators/drivers who intend to offer for-hire transportation services must be licensed by the DPUC and maintain a minimum of $1.5 million commercial liability insurance, and obtain a special “Hackney Operator’s License” issued by the DPUC prior to transporting passengers for hire in R.I.
Moreover, the bulletin notes, R.I. Gen. Laws § 39-14.1 requires that these services be provided only in vehicles bearing “Public Registration License Plates”. Anyone contemplating driving for such services should contact the DPUC, regulators said.
The bulletin says potential coverage gaps in personal auto policies include the following:
• Most standard personal auto policies contain exclusions for livery — which essentially means driving for hire. Typical exclusions found in policies are described below (but individual policy exclusions can vary and policyholders are advised to read their policies and exclusions, the bulletin says).
“Liability Coverage (Exclusion): We do not provide Liability Coverage for any insured: For that insureds liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This Exclusion does not apply to a share-the-expense car pool.”
“Medical Payments Coverage (Exclusion): We do not provide Medical Payments Coverage for any insured for bodily injury: Sustained while occupying your covered auto when it is being used as a public or livery conveyance. This Exclusion does not apply to a share-the-expense car pool.”
“Coverage for Damage to your Auto (Exclusion): We will not pay for: Loss to your covered auto or any non-owned auto which occurs while it is being used as a public or livery conveyance. This Exclusion does not apply to a share-the-expense car pool.”
• The bulletin says insurance companies might deny coverage to operators that are driving passengers for payment of more than a share-the-expense car pool fee based on the above exclusions or similar exclusions.
• The bulletin advises consumers to contact their insurance agent, broker or insurance company about potential gaps in their personal auto coverage that can arise if they are driving for one of these operators. Consumers may need to consider buying a commercial policy with medical payments, comprehensive, collision and UM/UIM to be certain that coverage exists for damage to them, their car and/or for damage caused by an uninsured or underinsured motorist while they are driving passengers for payment of more than a share-the-expense car pool fee.
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