The services provided by ridesharing companies are growing quickly because they are affordable, convenient, and trendy. Although a person can play many roles in the ride sharing operation, it is important to know that both the passenger and driver are at risk for BIG gaps in their automobile insurance coverage. As these services grow in popularity, most states are working to devise an insurance policy to cover these gaps but as of now, be aware!

For Passengers

Although ride sharing sounds like a good idea,  you should be aware of the insurance gaps allowed in the ridesharing industry. Per the Cincinnati Blog “Update: Ride Sharing May Create Insurance Gaps” (19 November, 2015), these ride sharing services require no standard auto insurance policy. Other ride services, like buses, taxis, and other forms of mass public transportation, are required by law to carry certain insurance coverage to protect both the passengers who use the services and the drivers who work for the service. Unfortunately, without such laws in place, it is impossible to confidently use the ridesharing services without wondering if you are at risk for unprotected injury or liability. Without laws, how does the rider know when and how they are covered while using the service? If the driver is involved in an accident while en route to pick up the passenger, is that the passenger’s fault and can they be held liable? If sued, is the passenger then covered by the insurance provided for the driver? If involved in an accident while riding as a passenger, is that the fault of the driver or that of the passenger? Can both be sued? These are all great questions that need to be answered before confidently using a ride sharing service!

For Drivers

If you are interested in participating as a driver in a ride sharing service, it is extremely important that you call your insurance company and ask whether your policy covers you for such activities (these activities are probably called  “public livery” in your insurance documents). Even if you are not participating as a driver in a large service, such as Uber, will you drive passengers for a fee? In our local area, many individuals provide a paid livery service for the elderly, Amish, and others who might just need a ride. Many insurance companies will use a very broad definition when using the term “paid livery service” and can consider the exchange of goods and services within the definition of being paid! Therefore, if you give your Amish neighbor rides to the super market or bank and in exchange you receive homemade bread or farm fresh veggies, you are actually providing public livery and may have voided your insurance coverage!

Pending Laws

According to an article published by the Insurance Agents and Brokers, “Is Finish Line in Sight for Ridesharing Bill?“, the Senate recently passed a legislation allowing ride sharing services to operate state wide. Until December 2nd , these services were operating illegally and could be fined millions as a result. At this time the Senate is contemplating options for the insurance requirement that will be imposed on all drivers within the ridesharing service. The pending policy will require the drivers to carry special insurance policies to cover the dangerous exposure of transporting individuals. This law will also have a supplementary clause that requires the employer to cover insurance that will pay when the driver does not carry the required amounts. This law has already passed the Senate and is waiting for approval within the House of Representatives.

Once a formal policy is in place for ridesharing services, passengers and drivers will be able to drive and ride at ease knowing that a standard must be met. Until that time, both drivers and passengers should be aware of the coverage gaps that they are allowing when providing a ride or accepting one.


Bernard, Bob, and Kirsten Faherty. “Update: Ride Sharing May Create Insurance Gaps.” The Cincinnati Insurance Companies Blog. The Cincinnati Insurance Companies, 19 Nov. 2015. Web. 8 Dec. 2015. <>.

“Is Finish Line in Sight for Ridesharing Bill?” Is Finish Line in Sight for Ridesharing Bill? Insurance Agents & Brokers, 2 Dec. 2015. Web. 8 Dec. 2015. <>.