WIInews - Insurance News Affecting RI Consumers

Need a Lyft?

The fall semester is already upon us.  As college students eagerly pile back in to their dorms the small talk of ‘what did you do this summer?’ gives way to the more important topic, ‘where are we drinking tonight?’  College students have been partying since college was invented.  We all know that it happens.  There is certainly nothing new about it.

What is new is the opportunity for Johnny Beer-Pong to fumble through his smartphone, and with a few misguided thumb taps on an app he just downloaded, request a “rideshare” taxi to pick him up and pour him out safely back at his dorm.  This is no ordinary taxi, however.  This taxi will be driven by Sally Valedictorian, because she never drinks, and has learned that by signing up to be a taxi driver there is a lot of profit to be made off her inebriated classmates.

This all sounds like a great idea until Debbie Downer, whose father just happens to be an insurance agent, says, “Sally, you can’t do that anymore.  Your car is not properly insured on a personal auto policy to be a taxi service!”

Unfortunately for Sally, Debbie is right.  Most personal auto policies have exclusions for liability to others, bodily injury, and physical damage coverage to your own vehicle when you are using your auto as a public or livery conveyance.  The only way to know for sure is to read your policy.

Beyond the insurance coverage issue, there are state laws regulating the licensing, safety, operation, and financial responsibility of for hire transportation services.  When you look at R.I. Gen. Laws 39-14.1 you will also see that there is also a specific section regarding the penalties for violating this statute.  To paraphrase, violators can be fined up to $1,000 or imprisoned for up to one year (or both) for EACH OFFENSE.  That handy little app that is tracking all of the rides Sally is providing is also tracking how many times she has been in violation of RI state laws.

While my scenario above poked fun at the college crowd and was designed to be a little whimsical, the potential dangers of being a rideshare driver (or passenger) are real and apply to anyone with an automobile, not just college students looking to make some money after class.

Here are some links with additional information on the complications of ridesharing.

  • Click here for the RI Department of Business Regulation Consumer Alert 2014-4: Participation in Ride-Sharing Programs-Potential Insurance Implications
  • Click here for a link to the National Association of Insurance Commissioners’ Consumer Alert for rideshare drivers.
  • Click here for a link to the National Association of Insurance Commissioners’ Consumer Alert for rideshare passengers.

Before you sign up with a national rideshare company like Lyft, UberX or Sidecar, there are two very important things that you need to do.  First, read your policy.  Second, call our team at Woodmansee Insurance to discuss your plans and coverage needs.  Please don’t leave your insurance to the fine print of a contract you reviewed on the three-by-five inch screen of your smartphone.