The following is the content of a press release issued by the California Department of Insurance this morning.
SACRAMENTO, Calif.- As demand for ridesharing or ride-hailing services continues to increase for business and personal travel, closing insurance gaps to protect consumers is a priority. Insurance Commissioner Jones announced today that he has approved a new insurance product submitted by Farmers Insurance that closes the gap in insurance coverage for drivers driving for ride-hailing companies, such as UberX, Lyft and Sidecar. Jones was joined by Farmers Group, Inc. CEO Jeff Dailey who also announced the new insurance product is available to consumers starting May 28 through its thousands of Farmers agents across the state.
“Closing the insurance gaps in ride-hailing coverage is essential to making sure passengers, other drivers and pedestrians are protected when ride-hailing vehicles are on the road,” said Insurance Commissioner Dave Jones. “I’m pleased to see Farmers, one of California’s major insurers, offer a product that closes the coverage gap.”
The popularity of ride-hailing services is evidenced by the exponential growth from 2014, when Lyft reported averaging 2.2 million rides per month and Uber nearly 12 million. So far, in 2015, Lyft reports averaging 2.5 million and Uber 30 million rides monthly. Even the business community is embracing the services, noting a 20 percent increase in ride-hailing use from first quarter in 2014 to the same quarter in 2015.
The new product covers period one, which begins once a driver turns on the ride-hailing application and is awaiting a match. Periods two and three-the match and transport period-are covered by the ride-hailing company’s insurance. The new policy enables drivers to select coverages that fit their needs, including comprehensive and collision coverages, uninsured and underinsured motorist coverages and medical payments coverage. Including Farmers ride-hailing coverage to a driver’s policy will add 8 percent to a customer’s premium.
“We want to thank Commissioner Dave Jones and his team for their leadership in helping to make this important, new coverage available to California drivers. As a California-based company, Farmers is proud to be the first major insurer to offer rideshare coverage to consumers in the state,” said Dailey. “We recognize the sharing economy will continue to have a long lasting effect on our state and we are committed to continue to work with the commissioner and the entire department on innovative solutions for the benefit of California’s consumers.”