Wednesday, May 7, 2014

Department of Business Regulation Issues Alert on Ride-Sharing

By: Edward L. Blais, JD, CIC

This past week, the Rhode Island Department of Business Regulation, Insurance Division, issued their Consumer Alert 2014-4: Participation in Ride-Sharing Programs/Potential Insurance Implications. This document outlines the insurance implications for those who engage their vehicle in ride-sharing, and the potential gaps that could affect them in the future.

Ride-sharing is the fast-growing system of offering your vehicle for personal transportation services. These types of operations involve pre-arranged services using an online-enabled application to connect with potential passengers.  Companies such as Lyft, UberX, and Sidecar are some familiar examples of these types of programs.

As this type of transportation is becoming vastly popular in urban areas, these potential insurance implications are important to be informed about, so below are the general summaries of each that are highlighted in the document:

-       Operators/drivers who intend to offer for hire transportation services must be licensed by the Division of Public Utilities and Carriers (DPUC) and maintain a minimum of $1.5 million commercial liability insurance
-       Such drivers much also obtain a Hackney Operator’s License issued by the DPUC prior to offering their services.
-       R.I. Gen. Laws require these services be provided in vehicles bearing “Public Registration License Plates.”

The document also covers the potential gaps in Personal Auto policies that one should talk to their agent about immediately prior to engaging in ride-sharing:

-       Liability Coverage: exclusions of this type of coverage for the ownership or operation of a vehicle as being used to public or livery conveyance.
-       Medical Payments Coverage: most policies exclude this coverage for any insured for bodiy injury if occurred while vehicle is being used for public or livery conveyance.
-       Coverage for Damage to your Auto: your policy will not pay for loss to your covered auto or any non-owned auto while being used as a public or livery conveyance.

The consumer alert clarifies that ride-sharing should not be confused with a ‘share-the-expense’ car pool, as those gaps in policies will not apply during such instances.

We encourage you to read more about this new alert here. If you are considering using your vehicle to participate in these types of services, please contact Blais Insurance at 725.0070 and we would welcome the opportunity to review your options to make certain you are fully protected.