Uber cites California as an example of the lopsidedness of insurance laws, stating that the $1 million liability commercial auto coverage requirements for Uber and other transportation network companies (TNC) is significantly higher than the $30,000 per person coverage required for personal vehicles. (Credit: Shutterstock)
Rideshare app Uber has launched an advertising campaign across several states it says have outsized auto insurance requirements for its drivers. One such ad is told from the perspective of an Uber driver who laments that rising insurance costs have resulted in higher prices for those who rely on ridesharing.
Most states require rideshare drivers to possess commercial auto insurance since most accidents in these situations would be excluded under personal auto policies. Uber drivers don’t have to purchase their own commercial auto policies, however, as the company purchases coverage for its drivers. To recoup these costs, Uber tacks on a service fee to be paid by the rider that covers things like insurance premiums, taxes and other mandated fees.
Uber dedicates a page on their website to discussing “unfair” insurance requirements, with one grievance being that rideshare driver insurance coverage requirements are higher than other vehicles on the road, including taxis and limousines.
The company cites California as an example of the lopsidedness of these laws, stating that the $1 million liability commercial auto coverage requirements for Uber and other transportation network companies (TNC) is significantly higher than the $30,000 per person coverage required for personal vehicles.
Nevada and New Jersey are also states on the rideshare’s radar for reform, with Uber stating TNC trips in these states are required to carry $1.5 million in liability coverage, compared to a $50,000 requirement per incident for personal vehicles. Uber also notes that this limit is higher than the $1 million liability coverage requirement in most states.
Five states require Uber drivers to have $1 million or more in uninsured or underinsured (UM/UIM) motorist insurance. This covers drivers in the case they are in an accident in which they are not at fault, but the at-fault drivers has no or insufficient insurance limits to cover the damage.
The amount of these insurance costs that riders shoulder varies state-to-state, of course, with Uber reporting that in places like New York, around 25% of their fare goes to insurance. However, in places like Washington, D.C. and Massachusetts, insurance may only make up about 5% of the ride bill.
States that see the highest percentage of rideshare costs go toward insurance include:
- California: 32%
- New Jersey: 32%
- Louisiana: 28%
- New York: 25%
- Georgia: 23%
Overall, Uber reports that their ride insurance costs in the U.S. have increased by around 50% over the last three years. It also argues that high insurance policy limits encourage high-dollar lawsuits, which pushes insurance costs even higher.
While Uber’s website directs the public to a sign-up page to learn more about how they can get involved in their movement, no specific regulation or legislation they plan to focus on is mentioned.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.