Rideshare services like Uber, Lyft, and TotalRide have changed the way people travel. At the push of a button, a person can request a total stranger to drive them almost anywhere they want, including work, school, sporting events, and concerts. There are even stories of professional athletes using such services to get to games. Given the amount of rideshare service companies in Arizona, the Arizona legislature has passed laws which require strict background searches and larger liability insurance policy limits.
Under Arizona law, rideshare service companies are referred to as “transportation network companies.” When a transportation network company driver is available to accept rides, but has not yet accepted a ride request, they are required to have a motor vehicle liability policy which provides coverage in the amount of $25,000.00 per person and $50,000.00 per accident for bodily injury, along with $20,000.00 per accident for property damage. After the driver has accepted a ride request, though, they are required to have primary commercial motor vehicle insurance coverage in the amount of $250,000.00 per incident, as well as commercial uninsured motorist coverage in the minimum amount of $250,000.00 per incident.
The relevant statute, A.R.S. § 28-4038, recognizes some drivers may not notify their automobile insurance carrier that they are driving for a transportation network company. As such, unless an insurance policy expressly provides coverage or contains an amendment or an endorsement which expressly provides coverage, the driver’s insurance policy is not required to provide coverage while the driver is logged in or providing transportation network services. However, insurance companies may still provide such coverage to their insureds by selling an endorsement to an existing motor vehicle liability insurance policy.
Transportation network company drivers are subject to criminal background checks and a review of their driver history report. They are also required to have at least one annual brake and tire inspection performed by a qualified third party. If a person has more than three (3) moving violations or one (1) major violation in the preceding three (3) years, they are ineligible to be a driver for a transportation network company. Transportation network companies are also required by law to implement a zero-tolerance policy on the use of drugs and alcohol. Assuming the transportation network company has done a good job of vetting its applicants, transportation network company drivers may be attractive customers for some insurance carriers.
If your insured is involved in an accident it is always important to determine if they were in the course and scope and their employment at the time of the accident. This includes assessing whether they were working for a rideshare service type company. As discussed above, this may affect the amount of available insurance coverage, trigger exclusions, or provide another source of recovery for injured claimants.
Thomas Rubin & Kelley has extensive experience dealing with automobile insurance coverage issues and the defense of professional drivers. Please call us if you need assistance with any of your Arizona claims.