Personal Auto -Transporting People
Does your personal insurance policy provide coverage if you transport people/clients/business customers/co-workers in the course of your job? The is best determined by reading the EXCLUSIONS on your policy (most people don’t). You can’t assume that transporting someone once for your job is covered. Exclusions are policy provisions that state what the insurer does not intend to cover. The primary function of exclusions is to clarify the coverages granted by the insurer, not to take away coverage by an insured.
Ride-Sharing/Car Pooling is covered on most policies, when you are car pooling to work and sharing gas. This type of activity is specifically addressed in your policy.
Uber & Lyft have policies to cover their drivers while on a fare. This type of usage has to be declared to your insurance carrier. No if’s, ands, or buts allowed. There are special optional endorsements on personal auto policies that defines when your policy is in effect, and where the on-demand transportation company’s policy is in effect.
You’re a realtor and occasionally drive someone to a listing. Big grey area. Some carriers allow this for realtors under Business Usage. Make sure this activity is declared to your insurance carrier and documented. Some realtors just don’t give rides anymore – there are a lot of other transportation options.
Social Usage. A group from work goes to lunch or another function on their own. Not required by the employer or a part of their job duties. Should be OK.
Transporting clients. I just checked with a number of insurance carriers – and all said ‘NO’ emphatically. Either it is not an acceptable ‘Business’ type exposure anymore, or it is now specifically excluded in the policy. Courts have generally found that a “public or livery conveyance” is a vehicle that is held out to the general public for hire. Generally transporting persons or property for a private employer (as an employee) is not a ‘public or livery conveyance’ use, when done incidentally to your job duties. Some insurers use a term such as “transporting persons or property for a fee” to broaden the exclusionary impact in the policy. Paid on a 1099 as an independent contractor and regularly transport persons or property? I recommend a commercial auto policy than chance it. Make sure you do have documentation if your personal carrier approves such usage (check the policy language or log comments).
Your best course of action is a commercial auto policy whose underwriters readily accept this type of risk. The cost is about $100/month more than a personal auto policy.
Buy your insurance online? Good luck with this. Read your policy’s exclusions. Below is the exclusion verbiage by three carriers. All three are different. Shopping online and want to know before you buy? Ask for a sample policy – and good luck with that too.
EXCLUSIONS We don’t provide coverage or a defense under Part I – Liability Coverages to any insured for: 1. Liability arising out of the ownership or operation of a motor vehicle while it’s being used to transport persons or deliver property for compensation of any kind, or while the operator is responding to a request for, or returning from, such transport or delivery. This exclusion doesn’t apply to a share-the-expense car pool.
*ISO 01 06 94 : For that ‘insured’s” liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This exclusion does not apply to a share-the expense car pool.
5. Any insured’s liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This includes but is not limited to any period of time while it is being used by any person who is logged in a transportation network platform as a driver, whether or not a passenger is occupying the vehicle. This exclusion (A.5.) does not apply to a share-the-expense car pool.
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