Using Your Personal Auto as a Taxi or Hotshot Service

We keep seeing commercials about how you can turn your personal automobile into a part-time career as a Lyft or Uber driver. Sounds great, doesn’t it?

Everyone likes the idea of making a few extra bucks on their “off” time, but here are some Insurance Facts you need to know before you decide to venture into this type of business.

#1: Your personal auto policy does not cover vehicle Liability if used to transport people or goods for a fee.

This means if you’re using your vehicle to work part or full time as an Uber or Lyft driver and/or to transport or ‘hotshot’ goods from one location to another for a fee, and you’re in an at-fault accident, the policy will not pay for damages you cause.

#2: Your personal auto policy will not pay for damages to your vehicle in the instance of an at-fault or not-at-fault claim under your Comprehensive and/or Collision coverage while the vehicle is in use as a taxi or hotshot service of any kind.

Just as the Liability will not pay for damages caused by your vehicle in the instance you’re on the clock as a taxi service or hot shot service, neither will the damages caused to your vehicle be covered.

#3: Your personal auto policy will not pay for bodily injury or property damage under your UM or Med Pay provisions if the vehicle is being utilized in a commercial activity.

It stands to reason if your automobile policy doesn’t cover the vehicle or liability damages, neither will it cover medical expenses if you’re using that vehicle in a commercial activity.

Think you’re safe because the company (Uber and/or Lyft) has a huge liability policy that’ll step in if yours doesn’t pay?

Not necessarily!

A Lyft or Uber liability policy may cover you while you’re on an actual trip, but will not cover to and/or from your location to pick up or drop off a passenger. In other words, it only covers you when your app is on! On top of that, theirs may only offer a “low level” of liability. True it should have to meet the state’s minimum liability limits, but again, those are rarely enough when you consider the fact you are virtually taking other people’s lives into your hands (and putting your life in theirs!) when you transport them somewhere.

Remember, yours is a Personal Auto Policy – Not Commercial.

Here’s another tip, beware of purchasing “ride-share” coverage. This may pick up the gap between leaving your home to pick up a passenger and then after drop-off back to the house (or wherever it is you stop between passengers) but again, it does not take the place of a true commercial auto policy.

If you’re interested in making extra money as a Lyft or Uber driver, by all means do so. But get your automobile policy changed to one that is specialized to cover you under such circumstances. Don’t assume you’ll be covered when in all actuality, you’re not. Give us a call and let us make sure you have the proper policy so you can rest easy and drive confidently while you earn those big bucks.

Until next time take care and remember....Before you act, know the facts.
Tommy Curtis and Staff