California Insurance Commissioner Dave Jones approved a new insurance product by USAA designed to close the gap in insurance coverage for drivers driving for all ridesharing companies.
The product is now available to USAA’s California drivers for all ridesharing companies, such as Uber and Lyft.
Ridesharing insurance is divided into three periods, with both ridesharing drivers and rideshare companies required to purchase coverage. Period 1 is when the driver has the ridesharing app open and is waiting for a match, Period 2 is when a match accepted but the passenger has not yet been picked up and Period 3 is when the passenger in the vehicle and until the passenger exits the vehicle.
The new product provides liability coverage in Period 1, which begins when a driver turns on the rideshare application and is waiting for a match.
USAA recently has approved a new ridesharing coverage product in California.
USAA’s policy also keeps in force during Period 1 optional coverages that the driver can purchase, such as medical payments, comprehensive, collision, rental, tow, and uninsured/underinsured motorist.
This new product can be added to a driver’s existing policy, increasing the premium by 7 percent, according to the California Department of Insurance.
“Closing the insurance gaps in ridesharing coverage is crucial to making sure passengers, other drivers and pedestrians are protected when ridesharing vehicles are on the road,” Jones said in a statement. “I am pleased to see USAA offer a product that closes the coverage gap and helps protect California’s consumers.”
Jones announced earlier this week State Farm is offering ridesharing drivers a new liability insurance option, which like the USAA product covers Period 1. The State Farm product also has the option to add additional coverages.
State Farm’s new product is available beginning March 21. The endorsement allows a ridesharing driver to have their personal auto policy fill in the insurance gaps left by rideshare company’s provided coverage.
Like the USAA product, State Farm’s policy also keeps in force during Period 1 optional coverages that the driver purchased, such as medical payments, comprehensive, collision, rental reimbursement and towing.
“More insurers are stepping up to meet the changing needs of California’s sharing economy,” said Commissioner Jones. “State Farm has created a product that closes the gap in insurance coverage and helps protect drivers, passengers and pedestrians when ride-hailing vehicles are on the road.”