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Farmers Insuring Uber Drivers in 12 More States

2/5/2020 (Permalink)

Farmers Insurance has expanded its relationship with Uber by providing commercial automobile insurance to its ridesharing drivers in 12 additional states and the District of Columbia.

In addition to the District of Columbia, Farmers will insure Uber drivers in Delaware, Hawaii, Indiana, Iowa, Kansas, Maryland, Missouri, Nebraska, North Dakota, South Dakota, Virginia, and West Virginia. These states are in addition to Pennsylvania and Georgia where Farmers already offers the coverage.

Farmers is the second insurer within weeks to announce or expand an Uber program, helping to fill a gap in Uber’s insurance that was exposed in the Oct. 8 announcement by James River Group that it was dropping Uber, its largest client, and cancelling all Uber policies as of Dec. 31.

Liberty Mutual Insurance last week said it started providing coverage for Uber drivers and passengers on Dec. 31, 2019. The Liberty Mutual program is available to drivers in Puerto Rico, South Carolina, Massachusetts, Connecticut, Rhode Island, Vermont, New Hampshire and Maine.

“Having been in the commercial automobile insurance business for more than 80 years, we are proud to have leveraged our talent and insights to develop an innovative commercial auto insurance solution that helps Uber and drivers using the Uber App,” said Sharon Fernandez, president of business insurance for Farmers Insurance.

Generally, states require drivers for transportation network companies like Uber to have insurance policies covering bodily injury liability, property damage and first party medical benefits.

Under the policies offered by Farmers and Liberty Mutual, coverage begins when drivers turn on their Uber App and coverage applies through ride acceptance, rider pick-up, and trip completion.

Farmers was one of the first insurers to offer an endorsement that extended some personal automobile insurance coverages to rideshare drivers while they were logged into their TNC’s smart phone application and waiting to be matched with a rider. The Farmers rideshare endorsement is now offered to drivers in 29 states.

 James River said it drooped Uber because the account did not meet its “expectations for profitability.” The insurer acknowledged that it mispriced policies in its first few years with Uber. The insurer also indicated that it believes that California’s new “gig” worker law governing contract workers such as ride-hailing drivers will increase claims for ride-share companies.

After St. James announced its exit, Uber told the Wall Street Journal it expected other insurers to replace James River as part of its insurance program. In addition to Farmers and Liberty Mutual, other insurers including Allstate and Progressive also provide coverage for Uber drivers. Uber also has a captive insurance subsidiary to cover certain risks.

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