Do these drivers risk losing insurance coverage if they don’t advise their insurance companies they’re using their cars for commercial purposes?
If I understand correctly, then during the time you are operating you personal vehicle as a business vehicle your personal insurance coverage does not apply. During the time you are using the Uber app and also carrying paying passengers you are under the coverage of insurance supplied by Uber.
So basically you are either covered by your personal insurance or the Uber supplied insurance but not both types of insurance at the same time.
Bottom line is your personal insurance company won’t pull your coverage for driving an Uber because you are still paying them premiums but during the time you are doing the Uber thing they don’t have to worry about any payouts for your accidents since at that time you are not covered by their insurance.
And in some states, there are supplemental insurances/riders you can buy to put on your personal policy that cover you under Uber. Here’s a run-down.
I’m going to have to amend what I said,
“What is the insurance gap? While you’re driving for Uber, you’re covered by their insurance. While the app is turned off, you’re covered by your personal insurance. But while the app is on and you’re looking for a customer, you’re covered by neither. And in some cases, personal auto insurance policies are being canceled once the insurance companies find out that the driver works for Uber or Lyft, so they’re stuck with no personal auto coverage.”
Really you need to know about is what the situation is in the state you live in if in America. There is no blanket regulations on the federal level. How things go in other countries I just don’t know.
Research shows me that the insurance companies are developing new types of insurance for these “rideshare” situations. Things are in flux and changing month by month in response to this new type of taxi cab.
from their personal insurer? Yes. when you take out a policy, you’re asked to state your intended usage of the vehicle. my policy states my car is a personal vehicle, used for transportation to work, school or for “pleasure.” the fact that Uber might see fit to cover you if you have an incident while being a taxi doesn’t prevent your personal insurer from dropping you because you were using your vehicle in a way not covered by your policy.
in short: No, Uber doesn’t get you out of jail free just because they have a smartphone app.
In the UK it doesn’t fly at all. Our insurance companies will drop you like a hot coal if they find the slightest thing that you failed to disclose. Using a car as a taxi can even affect the warranty on cars where they are extended more than a year.
Years ago there was some legislation to force them to cover ride sharing where there might be a financial arrangement, but there is a proviso that there can be no profit element.
I once ran my car as a part time taxi. It pretty much doubled my insurance premium. Many of my fellow part timers took the chance and didn’t buy the cover. If they had seriously injured someone they would have been id deep doodoo.
The problem is that Uber’s coverage is liability only. So if you wreck your car while driving for Uber, you will have to pay for repairs out of pocket which will cost thousands.