TEXAS COVERAGE
News & Markets continued from page 16 communicate to their drivers about the insurance coverages the companies provide. But, he said, “I don’t think they do a good job of telling them the other piece of it, which is that their personal insurance company would want to know” that their insureds are driving other people around for a fee. One of the main concerns of personal auto insurers has been the coverage gap between the time a driver is logged into the online rideshare service application as being available to pick up a customer and when a customer is actually in the vehicle. Walrum said the rideshare drivers he spoke with generally were confused about such coverage issues. “I’d taken a lot of Uber before this whole experiment. Since I started working here I always found myself asking the drivers about insurance because I’m learning about it here and it was interesting,” Waldrum said. “There was confusion all around the board. When I’d ask them, ‘How does Uber’s insurance work?’ or ‘How does Lyft’s insurance work?’ I got a lot of confused responses, where people really continued from page 20 Insurance Brokerage in Chicago, said it’s probably “going to take time and experience for a lot of the mainstream carriers to jump on board on these types of new products.” But specialty agencies, like Parr Insurance, are beginning to develop programs to address the needs of the sharing economy, she said. “What we’re seeing is specialty agencies that will build out programs specifically for a business, a shared economy business. And that’s going to be probably the model until the data is there to support pricing, especially on the homeowners side,” Neis said. Some insurers have been entering the 22 | INSURANCE JOURNAL-TEXAS June 1, 2015
weren’t totally sure when they were covered and what was covered by Uber and Lyft,” he said. Cheaper Rides In his blog post, Waldrum said that factoring in the cost of car payments, gas, personal auto insurance and auto maintenance, ridesharing, at least for him for one month, was cheaper than driving his own car. Waldrum estimated his personal auto expenses for a month amounted to $640, while the cost of his 50 Uber/Lyft rides for the month of January came to $527. He recognized that the results were subjective and that his commute to work was only 3.25 miles. A longer commute
obviously would have translated into more expensive rides, as would a larger number of total rides taken. Waldrum also acknowledged the limitations in exclusively using rideshare services versus driving one’s own vehicle. “After doing this experiment, I realized that having the flexibility to go anywhere at any point in my own car was something that’s hard to put a price tag on,” Waldrum wrote. He said his experiences with both Uber and Lyft were “completely satisfying,” however. The average wait time for both was just over four minutes and though he had expected he might have a harder time getting a ride in the morning when it was time to go to work, that did not occur. Uber was somewhat cheaper than Lyft (Uber lowered its prices during the time of Waldrum’s experiment); the 25 rides with Lyft cost Waldrum $60 more than the 25 rides with Uber. He found that more than half of the drivers he used — 60 percent — drove for both Uber and Lyft, and that there was a wide range in the age of the drivers — from college students to retirees.
TNC market in small steps, however. Farmers, USAA, Metlife and GEICO also In November 2014, Erie Insurance in have developed products for a limited marIndiana and Illinois began offering covket that address the “gap” period for TNCs. erage for every part of the trip: before, In addition, ISO has introduced two during and new personal after the hired ‘We’re adding drivers left and right.’ auto coverage ride through options for an endorsement to the personal auto ridesharing drivers when they’re logged in policy that allows for business use, such but don’t have any passengers. as ridesharing. Erie said depending on One of ISO’s new options would apply consumer response it plans to expand the from the time a driver logs in to the TNC product to other states. platform until they’ve accepted a ride Neis described Erie’s ridesharing request. The other option would apply endorsement as “state of the art” and said from when they log in to the TNC plather agency gets “phone calls for it all the form up until a passenger occupies their time. We’re adding drivers left and right.” vehicle. www.insurancejournal.com