USAA will begin offering this policy endorsement in Massachusetts on November 21st
United States Automobile Association (USAA) has become the first insurer in Massachusetts to begin offering additional coverage to its policyholders who also drive their cars for transportation network companies (TNC), like Uber and Lyft. In making the announcement about this first policy endorsement for TNC drivers, Governor Baker invited other insurers to follow suit.[pullquote]Beginning Nov. 21, USAA members will be able to purchase Ride Share Gap Protection for policies effective on or after Jan. 7, 2016.[/pullquote]
“As we work to develop a regulatory framework to support innovative ride-sharing companies, it’s crucial that appropriate coverage is available to protect drivers, passengers and the traveling public,” said Governor Baker. “With the first endorsement of its type taking effect for TNC drivers, we welcome others to participate in supporting consumer safety and choice in Massachusetts’ diverse transportation network. I also encourage the legislature to continue moving forward on our proposal to develop a regulatory structure that includes strong standards for both industry and consumer safety.”
As Agency Checklists reported, in April of this year, Governor Baker filed proposed legislation entitled “An Act Establishing Department of Public Utilities (DPU) Oversight of Transportation Network Companies.” With the legislature, this Act sought to create a statewide regulatory framework for TNCs that includes Criminal Offender Record Information (CORI) checks for all drivers and requires $1 million in minimum insurance coverage for drivers operating as TNCs, while clarifying existing insurance gaps.
“The Division of Insurance is pleased to announce the availability of an insurance product which provides necessary protection to consumers utilizing TNCs and which furthers the public’s interest in the availability of TNCs as a transportation alternative,” said Commissioner of Insurance Dan Judson.
As the Governor noted in his announcement, ride-sharing coverage is often necessary in order to protect TNC drivers during the time from which they turn on a TNC app while awaiting a ride until the time as such offer is accepted. Currently in the Commonwealth, all Massachusetts drivers, including TNC drivers, must carry personal automobile insurance. This personal auto insurance, however, specifically excludes an coverage from a personal policy when a policyholders operates a personal vehicle to transport goods or passengers for a fee. TNC companies like Uber and Lyft do provide a $1 million surplus line policy coverage to their drivers, covering from the time a ride is accepted to the pick-up and drop-off of a passenger. These policies are accepted by the state and would continue to be required under the Governor’s proposed legislation.[pullquote]With the first endorsement of its type taking effect for TNC drivers, we welcome others to participate in supporting consumer safety and choice in Massachusetts’ diverse transportation network – Governor Charlie Baker[/pullquote]
“The Division’s action is a positive step forward that will help ensure that drivers and the public are protected,” said Frank O’Brien, Property Casualty Insurers (PCI) Vice President. “When policymakers create a framework that is clear, concise and encourages innovation, insurers are able to develop new options such as this that can meet the demands of the sharing economy.”
”Beginning Nov. 21, USAA members will be able to purchase Ride Share Gap Protection for policies effective on or after Jan. 7, 2016. We are excited to provide this option to current and prospective members driving for TNCs to help them safeguard their financial security,” said Mark Medeiros, Product Manager for USAA. “We invite members to call 800-531-8722 (ext. 76127) for more information on this and other products and features available in Massachusetts.”
The DOI joins other states such as California, Connecticut, Texas, Utah and Virginia, in allowing the first policy endorsement of its type for use in Massachusetts, and encourages similar proposals from other insurance companies to cover TNC drivers.
