Sharing a Ride, But Not Insurance:
Protect yourself as a ridesharing passenger.

With holiday parties in full swing and New Year’s Eve around the corner, you’re probably thinking about how to stay safe while celebrating the season. Ridesharing services, such as Uber and Lyft, are transportation services that allow you to summon a ride via an app. However, there may be gaps in insurance coverage for ridesharing passengers. The National Association of Insurance Commissioners (NAIC) and its members recommend that consumers review these tips to make sure they are protected.

If you are considering using your personal vehicle to give rides and earn extra income, check out this consumer alert.

Note: For the purposes of this consumer alert, 'ridesharing' is used to describe the practice of driving for hire using an online-enabled platform to connect drivers—who are using their personal vehicles—with passengers.

Understanding Ridesharing
Ridesharing uses mobile technology to connect passengers to drivers. Instead of hailing a cab from the curb or calling an 800 number, consumers download an app to their smartphones that allows the customer to request a ride. The app also allows users to get price quotes for their trips, track the driver's location and to pay their fare using saved credit card information.

These services are provided by transportation network companies (TNCs). The two major TNCs are Uber and Lyft, although more are joining the market. TNCs allow drivers to use their personal vehicles to transport passengers and earn income.

Ridesharing is Different than Taking a Taxi
Ridesharing is not the same as taking a traditional taxi or limousine. Limos and taxis have been licensed by the state and/or local transportation authority to provide a livery service or to transport passengers for a fee. The vehicles are inspected and drivers must be properly licensed. Taxi operators are required to have insurance that protects a passenger and third parties, such as pedestrians or other drivers, in case of an accident that causes bodily injury or damage.

In many states, TNCs are not subject to the same licensing and insurance requirements that apply to taxis or limousines. However, as ridesharing becomes more popular, state insurance regulators and legislatures are taking action and working with TNCs to ensure consumers are adequately protected.

Protect Yourself as a Passenger
Before using a ridesharing service, research the companies operating in your city. Find out what insurance policies the TNC has to protect drivers and passengers, and how much liability coverage those policies offer. This information may be available on the TNC’s websites.

If you are concerned that a TNC may not have adequate coverage, talk to your insurance provider. Your personal auto policy will likely provide you with some coverage when you are a passenger. If you do not own a car, you might consider purchasing a "named non-owner" policy, which provides coverage for you above any insurance the vehicle's owner may have. If the owner is uninsured, or has low limits of liability, this type of policy can protect you as a passenger. These policies include protection for bodily injury or property damage, medical payments, and uninsured/underinsured motorist. In certain no-fault states, they may also include personal injury protection (PIP).

It’s a good idea to ask your driver to provide proof of TNC coverage when you enter the vehicle. Be wary of drivers who turn the app off or ask for cash payment in lieu of payment through the app. There may be no coverage available if the driver does not have a commercial auto policy and the transaction is not recorded through the app. The largest TNCs only provide coverage while the app is in use.

More Information
Contact your state insurance department to find out how it is handling matters involving ridesharing. You can also learn more about your state's requirements for personal auto insurance.

For more information about your insurance needs and tips for choosing the coverage that is best for you and your family, visit Insure U.

December 2015

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The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S. For consumer information, visit

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