Insurance experts warn of growing app-based services coverage gap

February 12, 2019 12:32 PM

Joe Bungert of Arden Hills has never used a ride-sharing service like Uber or Lyft before.

However, he's suddenly found himself dealing with thorny insurance issues related to the app-based services.


Bungert said he was hit while driving his wife to work in downtown Minneapolis.

"It spun me around and pushed me into a lamp pole," Bungert said. "I was going through an intersection and a car ran a red light and hit me in the door."

No one was hurt, but his car is totaled. And it turns out the other driver was an on-duty Uber driver who had a passenger.

"There are so many gaps in there and you really have to understand what you have and don't have," Dawn Janes-Bartley with Minnesota Insurance Group in Wayzata said.

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Janes-Bartley said many insurance companies are now changing their auto policies to clearly exclude coverage for ride-sharing and other app-based services. And it's not just Uber and Lyft. The same issues apply for all app-based services where people use their own vehicles for the work like grocery service Instacart and food delivery service GrubHub.

"They're calling it transportation network," she said. "So as soon as you log into the app and you're ready for someone to use your service, your coverage stops right at that moment you've turned your app on."

That's when the company's insurance kicks in. However, that presents a problem. It is sometimes the bare minimum coverage, and doesn't always cover damage to vehicles.

"They're not going to have to cover you for your car," Janes-Bartley said.

For example, Uber's website details how it's coverage is limited to start, then improves once drivers are headed to pick up fares. According to the website, the company's coverage is best once a passenger gets into the vehicle.

Some insurance companies are now selling ride sharing friendly policies that bridge the gap. But that coverage comes with an added cost.

"It's an add-on for a few hundred dollars a year and it works like a puzzle and goes and fills in those gaps," Janes-Bartley said.

However, there's no requirement for drivers who are working for these app-based services to carry that added and more expensive coverage. Janes-Bartley said all drivers can help protect themselves by knowing and possibly increasing their own underinsured and uninsured coverage, which she said is often not very expensive.


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Matt Belanger

Copyright 2019 - KSTP-TV, LLC A Hubbard Broadcasting Company


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