Ride sharing services are in the news. Riders like the convenience of being able to arrange for a ride with the touch of a few buttons on their smartphone, and drivers like the opportunity to make a few dollars on every ride. Drivers should be aware that North Carolina auto insurance doesn’t always offer the level of coverage they need for ferrying passengers for money. There are additional insurance considerations if the ride sharing arrangement involves lending the car to another driver.
Ride sharing and vehicle sharing arrangements are fairly new, so the details of insurance and licensing for drivers are still being worked out. While ride sharing seems like a simple arrangement, it opens up the driver for complicated levels of liabilities under certain circumstances. North Carolina auto insurance policies that are designed for regular drivers aren’t comprehensive enough to cover every eventuality.
Passengers who take advantage of ride sharing services also need to understand that they’re not getting the benefit of the kinds of insurance they have in place when they drive their own cars, or when they use a traditional taxi service. Taxicabs, especially in big cities, are a highly regulated industry with a long track record. The issues that arise with liability for drivers and passengers during traditional taxi rides are well understood by insurance companies, law enforcement, and the general public. That’s not the case for ride sharing services.
North Carolina auto insurance designed for the general public doesn’t have nearly the amount of liability insurance that a regulated business like a taxi company requires. If an accident occurs when you’re a passenger in a ride sharing car, you have no way of knowing exactly how much North Carolina auto insurance that the driver is carrying, or what it covers. To recover damages you suffer in a ride sharing accident, you may be forced to pay an attorney out of your own pocket to sue the driver, and they may not have adequate insurance in place to cover your injuries. They also may not have personal assets that you can go after to make up the difference.
Ride share services are responding to public pressure by supplying an umbrella insurance policy for all their drivers, but that approach also has holes in it. The policy only applies while the driver is actively ferrying passengers, and it doesn’t cover damage to the car itself. The driver will still have to carry enough insurance on the car to cover his own losses, and hope that the umbrella policy will cover his passengers.