Uber, Lyft and Car Insurance

Dallas and the North Central Texas Council of Governments, like many municipalities, are working through the task of creating a consistent car for hire policy. The goal is to create a seamless regional approach for cabs, limos, and app based companies like Uber and Lyft. If successful, we can avoid a patchwork approach of different rules and regulations for Dallas, Fort Worth, Plano, Grapevine, Richardson, Keller, etc.

The big question NCTCOG is grappling with is whether or not there should be an individual set of or ordinances for cabs, limos, and app based companies, or if they should operate under a unified set of ordinances which applies to all business segments. A Dallas City Council task force had ironed out most of the work for a unified approach before NCTCOG stepped in.

The NCTCOG taskforce is leaning toward a separate set of ordinances for each business model addressing the issues of fare regulation, permitting process, and insurance requirements. Uber and Lyft represent an interesting change in the traditional car for hire space. Previously, municipalities crafted laws and regulations for cabs and limo companies addressing fare structures and even what the minimum limits of commercial car insurance cabbies and limo owners have to carry.

I’m excited to see the insurance requirements being addressed. I’ve run into a few instances where a driver for Uber or Lyft carried limits far below what is required of a cabbie. Even more alarming, was none of the drivers I talked with were aware their personal car insurance would not cover them in an accident. The reason is personal insurance is what we use to protect our personal vehicles whether we drive infrequently, commute to and from an office, or drive around north Texas for business meetings.

The moment a person picks up their first rider for Uber, Lyft, or a similar service, they become a commercial driver. As I wrote in an earlier post (see most car insurance companies would deny an accident claim for property damage, let alone a liability claim if a passenger were injured, for anyone using their car to shuttle passengers on a for hire basis.

The solution is to obtain a taxi or limo policy with appropriate limits such as $1,000,000. The policy will be more expensive, however, it will cover someone driving for Uber or Lyft without any worries of having a claim denied or exposing the driver or rider unnecessarily.

What do you think? Share your comments, questions, and experiences with me on our Google +, Facebook, and LinkedIn pages. I’d love to hear from you!

Evie Wise
Evie Wise


Evie Wise
Evie Wise

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