A new Texas state law requires Lyft and Uber drivers to get more liability insurance. As of January 1, Transportation Network Companies (TNC) and their drivers need additional coverage when the ride hailing app is on -- even if no one else is in the car.
The basic minimum liability coverage for Texas drivers is 30/60/25. That means you're covered for $30,000 per person injured in a wreck, up to a total of $60,000 per accident and $25,000 in property damage per accident.
A new state law requires TNC drivers to have 50/100/25 coverage when the app is on and they aren't giving a ride and $1 million in coverage when they are giving a ride.
"It's safety for both the driver and the passenger," says Mark Hanna, spokesperson for the Insurance Council of Texas. TNCs like Uber and Lyft already provide their drivers with commercial liability insurance up to the required $1 million, but this new law affects those moments in between.
"That gray area is when you don't have a passenger in the vehicle. Who's covering you? I think that's the part that nobody is clearly addressing," says Anthony Nguyen, who drives for both Uber and Lyft. Monday Nguyen was making calls and reading HB 1733 trying to navigate what the insurance requirement means for him.
"Either you get an endorsement from your personal policy or Uber and Lyft pays for it," he explains.
Either way, if you drive for a TNC, you must have that extra coverage of $50,000 for each injured person in a wreck up to a total of $100,000 per accident and property damage coverage up to $25,000 per accident.
"A lot of insurance companies are taking a close look at it and seeing if they want to offer this type of policy," adds Hanna. Insurance companies won't be required to offer TNC endorsements or coverage but with more than 100 auto insurance providers in the state of Texas, Hanna doesn't expect the coverage to be hard to come by.
Industry experts recommend TNC drivers talk with their insurance agents to make sure they have the right coverage because at the end of the day, they're the ones behind the wheel and they're the ones responsible.
If a TNC driver ends up getting the new TNC endorsement added to their personal policy, then they'll own that coverage outright. However, it would likely increase their monthly auto insurance costs. TNC drivers will need to talk to the companies they drive for as well as their insurance agents to make sure they're covered at the right amounts.