Starting July 1, a new law is requiring ride-share drivers and companies to have liability insurance coverage during three periods in which they use the ride-sharing application.
The three periods include: App open — waiting for a match, match accepted — i.e. driver is on his or her way to pick up the passenger and period three is the time from when the passenger enters the car to when they exit.
Before, transporting passengers has been excluded from most personal auto policies Californians could obtain.
“Closing insurance gaps in ride-sharing coverage is essential to making sure passengers, other drivers and pedestrians are protected when ride-sharing vehicles are on the road,” said Insurance Commissioner Dave Jones in a news release. “This new law is a good start and requires [Transportation Network Companies] to provide liability coverage or make sure drivers have liability coverage during all periods the TNC application is on.”
So far, new insurance products have been approved for Farmer’s Insurance and Metromile to cover drivers in the pre-match period.
Ride-sharing companies are required under California law to provide drivers with $1 million in liability coverage from the time a match is accepted until the passenger exits the vehicle.
Currently, drivers have to purchase comprehensive and collision coverage on his or her own auto policy.
“Insurance regulations, in conjunction with the [California Public Utilities Commission’s] other rules, increase consumer safety and protection when using online-enabled transportation,” said CPUC Commissioner Liane M. Randolph in a news release.
Read more about the insurance changes here.