lyft-pinkRide-sharing service Lyft announced tonight that drivers who are searching for rides will be covered by the company’s insurance policy. The move expands Lyft’s policy to situations when drivers haven’t been covered by the company in the past.

While Lyft said that the company believes that drivers’ personal policies should cover any accidents before the company’s policy kicks in, the insurance expansion should provide “backstop coverage.” The ridesharing company said it conducted a review of policies from the “top insurance carriers,” and found that the vast majority of personal coverage policies cover drivers in between fares.

Still, the gap in insurance coverage has been a key concern for critics of the ridesharing industry. Seattle City Councilwoman Sally Clark told Reuters last month that insurance coverage is the council’s “number one concern.”

It’s unclear if the expanded insurance coverage will do enough to ensure that drivers are covered when working for Lyft. Insurance companies argue that drivers who work for ridesharing companies need to carry commercial insurance policies, which often cost thousands of dollars a month. Drivers have reported having their personal policies cancelled when their insurers find out that they are driving for a ridesharing company, while others have had their claims denied if they’re in an accident on the job.

There’s more news coming for watchers of the ridesharing industry. Uber CEO Travis Kalanick is slated to speak to journalists on a conference call about insurance issues tomorrow.

The insurance changes come at an opportune time for ridesharing companies. Seattle’s City Council is set to vote on ridesharing regulations on Monday. Councilmembers previously voted 5-4 in favor of regulations that would restrict ridesharing companies to 150 active drivers at any given time at a committee meeting last month.

Comments

  • Blah

    Of course the insurance companies would deny coverage for Lyft drivers. Personal insurance policies are based on non-commercial use. If you are driving for commercial use, you need a commercial insurance policy. That is why all small business insurance policy packages include commercial driving insurance and that is why the cost of those policies varies massively depending on the type of business you are in. A law firm pays less for its driving coverage than a pizza delivery service for instance. It is pretty simple.

    Lyft and Uber adding coverage for their drivers makes sense and is a reasonable requirement. Mandatory drivers insurance requirements are not for the benefit of the driver, they are for the benefit of the people a driver gets in an accident with.

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