In every personal auto policy there is a big exclusion. It says that if you are delivering someone or something for a fee you are not covered. This does not apply if you are car-pooling, doing something for charity or volunteering, but what about our favorite rideshare app, Uber? Are you covered to drive for Uber, and are you covered if you hire an Uber to drive you?

These questions have been debated by State Regulators for many months since the 2013 incident in California where a 6-year-old was struck in a crosswalk by an Uber driver awaiting a fare.

Minnesota has been tough on Uber, and threatened to pull out of our state altogether (our regulations are some of the tightest in the country) but Uber fans wrote to their legislators. Now legislators and Uber have come to an agreement, so it seems.

A new MN Insurance law requires Uber to provide their drivers with excess insurance when they are in Phase 1 (turned app on, driving to go get a fare) and while they are in Phase 2 (actually driving the fare). During Phase 1 Uber must provide $50,000/$100,000/$25,000 liability limits for their drivers. In Phase 2, Uber must provide $1,000,000 of liability. This insurance goes over the insurance that the driver has, no matter if they have a personal policy or commercial auto policy. Of course, it is in Uber’s best interest to only hire drivers that have a commercial auto policy. Uber is starting to demand their drivers hold commercial auto policies because otherwise they are on the hook for the whole claim.

Uber is not happy, but they are complying. Covering this gap in liability insurance is expensive. But what about the physical damage of the Uber car? Right now, that is not covered if the driver has a regular personal auto policy. In fact, if the driver tries to turn in a physical damage claim while driving for Uber the claim would get denied and the policy could get cancelled.

Some insurance companies are working to make an endorsement available that you can buy for your personal auto policy that gives you the coverage for driving for a fee. If that becomes available it could solve some problems and allow the drivers to only have to carry one insurance policy to drive for Uber.

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