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Insurance Requirements Take Effect for California Ride-Sharing Companies

Ride-sharing companies that operate in California will now have to abide by new insurance rules. The new law requires companies like Uber and Lyft to meet certain minimum liability insurance coverage requirements, which are intended to address coverage gaps that can arise with this new type of transportation service.

As we have previously discussed on this San Diego Injury Blog, transportation network companies (TNCs) use smart phone applications (apps) to connect drivers using their personal vehicles with passengers who need a ride. One of the primary concerns with ride-sharing companies is who is responsible if an accident occurs, particularly if an uninsured or underinsured driver is at fault.

The new law (AB 2293) mandates that TNCs to carry liability insurance coverage for three periods: 1. the application is open and the driver is waiting for a match; 2. the match is accepted, but the passenger not yet picked up (i.e., driver is on his/her way to pick up the passenger); and 3. from when the passenger enters the vehicle and until the passenger exits the vehicle. The new law specifically requires:

  • The transportation network company to maintain $1 million in liability coverage from the time a match is accepted until the passenger exits the vehicle (periods two and three).
  • The driver or the TNC company to maintain primary liability insurance in the pre-match period (period one).
  • $50,000 minimum for injury to a single person
  • $100,000 minimum for injury to multiple persons
  • $30,000 minimum for property damage
  • TNCs must also maintain $200,000 in excess insurance in the pre-match period.

“Closing insurance gaps in ride-sharing coverage is essential to making sure passengers, other drivers and pedestrians are protected when ride-sharing vehicles are on the road,” California Insurance Commissioner Dave Jones said in a press statement. “This new law is a good start and requires TNCs to provide liability coverage or make sure drivers have liability coverage during all periods the TNC application is on.”

If you or someone you love has been seriously injured in a San Diego motor vehicle accident, don’t hesitate to contacta San Diego personal injury attorney at the Law Offices of Robert Vaage for a free consultation.