900 S Pine Island Rd Ste 300
Plantation, FL 33324
Phone: 1-888-253-8498 / 954-382-4350
Fax: 954-382-2810

Get an Insurance Quote!

Business, Auto, Home, Health, Life, and Dental
Insurance quotes in Just Minutes!
Get a Quote

Are Transportation Network Companies Putting You at Über-Risk on the Roads?

by Anita Byer2/23/2017

Have you ever heard of a Transportation Network Company or TNC? If you don’t think you have, think again. Uber, Lyft and Sidecar are all TNCs that arrange transportation for a fee using technology platforms like mobile apps and websites. Given their relative infancy, TNCs are experiencing some growing pains, particularly when it comes to insurance.

Since TNCs fall somewhere between traditional ride-sharing or carpooling activities and taxi or limousine services, there may be potentially significant insurance coverage gaps. If there is an accident involving a TNC, these gaps can affect not only TNC drivers and passengers, but others motorists and pedestrians sharing the roadways.

Coverage gaps are primarily caused by TNC drivers relying on their personal automobile insurance policy for coverage instead of obtaining a commercial insurance policy. Standard personal automobile policies typically exclude coverage when the vehicle is used for commercial purposes, like carrying passengers for a fee. As a result, personal automobile insurance coverages, including liability, physical damage, uninsured motorist and medical payments coverage, may not be available if there is a TNC-related accident.

Gaps are also caused by risk exposures that are unique to the TNC industry. The personal vs. commercial distinction, which was once relatively straightforward, has been blurred by TNCs. Since this distinction is used to determine coverage under a driver’s personal automobile policy, the challenge has become identifying the exact moment an insured personal driver becomes an uninsured commercial TNC driver.

Under the TNC business model, there are three distinct risk exposure periods.

  • Period 1 (Pre-Match): Starts when the TNC driver logs into the TNC application, but is not matched with a passenger.
  • Period 2 (Match Accepted): Starts when a match is made and accepted, but before the passenger enters the vehicle.
  • Period 3 (Occupancy): Starts when the passenger has been picked up and is occupying the vehicle.

Standard personal automobile policies don’t specifically address these periods, so there can confusion and uncertainty when it comes to determining the scope of insurance coverage, if any. However, some insurance companies have amended their exclusions to clarify that once a driver logs into their TNC platform, they are no longer covered under the policy.

Due to their growing popularity, many states have enacted or are in the process of enacting statutory insurance requirements for TNCs and drivers. Florida, for example, has recently proposed legislation to create specific insurance requirements for TNCs. Interestingly, the amount of insurance required under this proposed legislation varies depending on which period the TNC driver happens to be in. Higher coverage limits apply when a driver moves from Period 1 (Pre-Match) to Period 2 (Match Accepted).

Until the current uncertainty surrounding TNCs and insurance coverage is resolved, steps can be taken to reduce the risk of falling into an insurance coverage gap, such as:

  • TNC Drivers: Review your personal automobile insurance policy to find out whether, and to what extent, TNC-related uses are covered or excluded. Find out what kind of insurance coverage is provided by your TNC. Compare your personal insurance and any TNC-provided insurance to identify potential coverage gaps. Obtain additional insurance to fill the gaps.
  • TNC Riders: Find out what insurance requirements apply to TNCs in your area. Confirm (or require) that your driver meets or exceed these requirements.
  • Employers: Update employment and fleet policies to strictly prohibit employees from using company-owned vehicles to engage in any TNC-related activities. This prohibition should also apply to employees using personal vehicles for work-related purposes, so they don’t pick up passengers while running work-related errands.

Please contact us to discuss how we can help you identify and close TNC-related insurance coverage gaps.

To receive regular updates about important insurance developments, subscribe to Setnor Byer Insurance & Risk's weekly risk management news brief.

Add comment

  • Comment
  • Preview

We're here to make your insurance transaction effective and streamlined, while providing you with an experienced Agent to offer the best coverage at the lowest rate possible. With over 30 years experience providing business and personal insurance throughout the U.S., we can offer you products from the nation's leading Insurance Companies such as Travelers, The Hartford, Allied Insurance, Aetna, CNA, FCCI, & more. We integrate traditional insurance products with risk management services including policy development, online training, and other support processes to give our clients everything they need and then some. Call us, Email us, Tweet us, or Like us to see what we mean when we say that Setnor Byer is "Talking Insurance in a New Kind of Way."

If you'd like to speak directly with our Subject Matter Experts please contact Martin Salcedo at .

All requests for permission to reprint or copy any material from Setnor Byer publications should be sent via e-mail to . Please review our Disclaimer for our terms of use.

Setnor Byer Insurance & Risk's newsletters and publications are intended as an information source for the clients and friends of the firm. Their content should not be construed as legal advice, and readers should not act upon the information in these publications without professional guidance. Please note that newsletters and publications that are archived by Setnor Byer Insurance & Risk are not updated after initial publication and may not contain the most current information available.

Email IconSubscribe to our weekly
email newsletter

Why Choose Setnor Byer Insurance & Risk?

  • Insurance that fits your Budget
  • Over 30 Years providing Insurance to Businesses and Individuals
  • Agents ready to guide you on your Insurance Selections
  • 24/7 Emergency Claims & Service Line
  • Multiple Quotes from A-Rated Insurance Companies
  • Dedicated to Giving Back to the Community

Search for Articles by Keywords