How does insurance work for ridesharing?

Ridesharing brings about many interesting questions and concerns about liability when there is an accident. 

Inc. explains that rideshare companies provide some liability insurance, but more often than not, there are gaps in coverage that could leave you vulnerable. In the event that you are in a rideshare vehicle and experience an accident, you should do your best to gather insurance information from the driver and the company. 

Driver insurance

Some companies require drivers to also carry their own personal insurance. However, not every personal insurance policy will cover activities while a person is working for a rideshare company. 

So, your driver may have auto insurance that will not cover you at all in an accident. In some cases, this is the only insurance carried by the driver or rideshare company, which can leave you in a bad situation where an insurer will deny any claim you make. 

Ideally, the best possible situation is one in which a rideshare company makes drivers carry commercial liability insurance. This will offer you the best coverage. 

The law

State laws have not caught up to the rideshare popularity boom, so there are no laws to cover who needs what insurance. Looking at taxis, which are a similar service, states require them to carry primary commercial auto liability insurance. It provides good coverage and allows for clear liability claims. 

This may be where states look when developing rideshare insurance laws. However, such insurance is incredibly expensive due to the high risk the insurer takes with each policy. The cost could have negative effects on the industry if this type of insurance becomes mandatory.