Skip to main content

Millennial Misconceptions of Insurance: Ridesharing

As of today I will no longer be using any ridesharing service. This decision isn’t a result of poor customer service, negative publicity, or that I was a passenger during an accident. The reason is simple; I refuse to continue to put these drivers, who are just trying to make a living, at risk. We as millennials continue to live under the misconception that large businesses have our best interests in mind. Unfortunately, some companies don’t see us as students paying off loans or someone just starting a family, they look at us as a wallet in a pocket with green pieces of paper or plastic.

Recently, a colleague of mine was reviewing the lease for his 2015 Honda Accord and brought to my attention one sentence regarding the Terms of Use of the vehicle. It read as follows, “I will not use or allow the Vehicle to be used illegally, improperly, or to transport goods or people for pay.” The penalties for violating this clause might result in the following: termination of the lease and possession of the vehicle and repossession of the vehicle by the leasing company. Ridesharing continues to be a hot topic around the country for reasons such as, employee classifications, area specific regulations, and whether or not this “livery” service will be covered by your personal auto insurance.

The personal auto policy is designed to provide coverage while the insured party is driving for leisure, personal reasons, or when commuting to and from work. In fact, many policies specifically exclude coverage for accidents that occur while the driver is driving a passenger for pay. Due to this exclusion and the growing popularity of services such as, Uber and Lyft, in some states major insurance carriers are beginning to release endorsements to extend coverage for ridesharing activities. The developments have been widely praised and publicized, but what are those extensions adding on to your policy?

The answer is quite startling and inspired the entirety of this blog. Recently ISO, Insurance Service Office, is releasing two optional endorsements, available in fall 2015, for transportation network companies, they cover Phase 1 and 2 of the ridesharing experience. Phase 1 is when a driver logs on to the app but hasn’t matched with a passenger. Phase 2 is when a passenger match is made and accepted. There is no coverage in a personal auto policy for Phase 3, which is when there is a passenger in the vehicle, even if these ridesharing endorsements are added. This misconception can result in those already tough to obtain green pieces of paper being further depleted.

To quantify the amount of drivers who do not have coverage the following research was conducted:

  • Only 8% nationwide of rideshare participants indicated they had obtained the ridesharing endorsement [1]
  • One major ridesharing company listed their active drivers, in December 2014, at 162,037, doubling every 6 months. [2]
  • Based on the above statistic it can be safely assumed that as of July 2015, the company currently has approximately 324,074 drivers


With this information I discovered that of the 324,074 drivers for the ridesharing giant, only 25,925 are adequately covered at the time of an accident and only when driving to pick up a passenger. Thus, in a typical personal auto policy no coverage whatsoever is provided while a passenger is in the vehicle. The ridesharing company is responsible for your personal auto insurance as soon as the passenger gets in your car. [3] If you are a driver for a ridesharing company and have concerns about your insurance or contracts, contact your insurance agent or ridesharing company today because unfortunately bad things do happen to good people.

As millennials we must address our misconceptions and realize that convenience isn’t always convenient. As the most informed generation in history with all the information we could possibly imagine just a click away, why settle for the bare minimum? Therefore, a question arises as ridesharing becomes and continues to be a staple for our generation and may seem like an attractive method for making a quick buck, but before you turn on that app, think to yourself, is it worth it?

For more information regarding your personal auto insurance policies please contact Rue Insurance at (609) 586-7474

Alec Wells

Business Development Coordinator/ Resident Millennial

Scott Harrigan

About Scott Harrigan

Scott started his career in insurance in 1988 and joined Rue Insurance in 2004 as a Marketing Specialist focusing on creating effective risk financing and risk transfer programs for companies and non-profit organizations. In addition to this he is a member of the Rue Insurance educational team that provides ongoing professional development in critical insurance concepts and programs to Rue employees. About Scott | More Posts by Scott