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Being an Uber Driver: Is it Worth the Risk?

Want to be an Uber driver in Montgomery?

Three weeks ago the city finally approved the ride-sharing ordinance at its Tuesday night meeting.

The ride-sharing, or Transportation Network Company (TNC), Uber, brings with it not just questions on public transportation in the city of Montgomery, but also on insurance—especially if you want to be an Uber driver.

How It Works

In order to be an Uber driver, you must verify that your car is in fact insured and in proper working order. Other than that, there are no other requirements besides a background check.

But, before you become a driver, you should do some research on your current auto insurance policy. Many have a livery exclusion, which is, essentially, driving for hire, and, therefore, will deny you coverage for livery.

On the other hand, there are plenty of carriers that would insure you on a commercial basis. Some personal line carriers, for an additional premium, have a ride-sharing endorsement they can attach to your policy.

Many carriers have already released rideshare endorsements or are in the process of doing so. Just because a carrier has a rideshare policy in another state does not necessarily mean that it is available in your state.

Know When You Will Be Covered & When You Won’t

Uber’s Excess Coverage:

Excess coverage means that Uber’s coverage is tailored to cover their drivers when they are for hire.

This means when the driver has the app on and is en route to a passenger or carrying a passenger, then Uber’s policy should respond. However, this has not been tested in Alabama courts.

Tips if You’re Going to be a Driver

  1. Consider Umbrella insurance if you have a higher net worth.
  2. Consider the purchase of a commercial automobile policy instead of relying on your less expensive personal insurance.
  3. Make sure you have great coverage, collision and comprehensive; you want it all.
  4. As ride-sharing becomes more prominent, look for companies that offer coverage specifically tailored toward this unique exposure.

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