TNCs (technology network company) are transporting passengers without commercial insurance or proper driver background checks.

In a recent article on BuzzFeed, reporters Ken Bensinger and Johana Bhuiyan did a bit of under-cover work, posing as prospective drivers, and found some representatives of Uber, are” steering drivers to purchase auto insurance that leaves them uncovered when they’re trolling for fares and that often forces them to flout the law by lying when they register their automobiles.” Their conclusion was base to documents, interviews, and an Uber presentation attended by a BuzzFeed News reporter.

From an experienced insurance agent (Urban Insurance Agency) in Chicago, I have frequently had newly-signed Uber drivers, come in, or call and tell me that Uber told them that Drivers only need personal auto insurance on their car, because Uber carries $1,000,000 policy to protect passengers. I am not sure if there are some employees that are actually stating this, or if people are just misunderstanding what they are being told.

I have heard drivers quote that one million dollar figure as a reason to feel safe and properly insured. The truth is that the contracts drivers are signing, are worded in a way that can leave holes large enough to drive a limo through. First it is vital to understand the auto liability Uber, Lyft or Sidecar have in place is there to protect them and not the owner/drivers. These services expect drivers to show they have car insurance, but when these owner/drivers are carrying passengers for money, they are acting as a livery service- Simply put, private passenger policies will not pay for damages arriving out of commercial use. This “Hole” at the time of a loss, could leave the owner of the car in a dreadful mess. Depending on the situation, Uber “Might” pay for the damage you do to other persons or property, but they will not pay for damage to your own auto. That means if your car is totaled- you’re out of luck.

Since Uber, Lyft or Sidecar have coverage that is an “Excess policy,” if your insurance company (Primary coverage) denies the claim, then typically the excess policy will not pay either. Also it worth taking note, while coverage might exist for the passengers in your car, what about pedestrians or drivers in other vehicles that you injure?