May 22, 2014

Riders and drivers should check their insurance before using ride-sharing services, officials say

Lyft and UberX require their drivers to have auto insurance and provide insurance coverage of up to $1 million on top of that.

The Kansas insurance commissioner urged consumers on Thursday to check with their insurance companies before riding with or becoming a driver for ride-sharing services like Lyft and UberX.

Both companies recently began doing business in the Kansas City area, and some transportation and insurance officials have raised concerns about insurance coverage, Sandy Praeger said.

“It’s important that consumers understand what their policies cover,” she said.

Lyft and UberX, both based in San Francisco, compete with local cab companies for fares. Through a smartphone app, Lyft and UberX pair people needing rides with independent drivers who use their own cars and ask for a “donation.” The companies then take a cut.

Both Lyft and UberX require their drivers to have auto insurance and provide insurance coverage of up to $1 million on top of that.

“While we do expect personal insurance carriers to cover the time period prior to a driver carrying a passenger, in order to erase any uncertainty, Lyft voluntarily provides additional protection,” Lyft spokeswoman Katie Dally said.

Praeger said drivers should check with their insurance companies before joining a ride-sharing service to make sure “the arrangement doesn’t jeopardize the renewability of their insurance coverage.”

UberX currently operates only on the Missouri side, a company spokesman said.

As for passengers, Kansas Insurance Department spokesman Bob Hanson said the same rules apply in that state whether the person is hitchhiking, is riding with a friend or has hired Lyft to take them. Should an accident occur, the rider would file a claim for medical cost with his or her own auto insurance, if the rider owns a vehicle.

Riders who don’t drive would file their claim with the driver’s insurance company.

Missouri, on the other hand, does not require personal injury protection in auto policies.

“In Missouri, coverage primarily is on the vehicle being driven. So the passenger would look to the driver’s insurer for medical payments,” said Jim Camoriano, regional spokesman for State Farm Insurance. “It’s also possible that if the driver is not at fault and does not have medical coverage, the passenger’s medical coverage could come into play.”

To reach Mike Hendricks, call 816-234-4738 or send email to mhendricks@kcstar.com.

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