FRIDAY, MARCH 13, 2015
Progressive’s new auto policy rolled out this week in Pennsylvania and is designed to cover Lyft drivers, both when they are en route to pick up a customer and when they’re off the clock. Any Lyft driver qualified for general coverage from Progressive is qualified for the new policy.
The policy will replace the driver’s existing personal auto coverage—an important distinction, as many state insurance departments have struggled to determine when coverage from a personal auto policy stops and commercial coverage begins.
“There are three set periods of potential exposure,” explained Peter Kochenburger, a professor of insurance law at the University of Connecticut School of Law. “One, an Uber driver is going around hoping to get business. The second period is when he’s been contacted and is en route to pick up the passenger and going to the destination.”
The third period is the actual driving of the passenger.
Progressive entered the market after Uber and Lyft failed to convince the Pennsylvia Insurance Commission that their company policies, both administered by James River Insurance, should not be in place when their drivers are not working, instead only going into effect during the third period outlined by Kochenburger.
The state decided on a tiered system in which the ridesharing company’s goes into effect as soon as the driver switches on the app that allows him or her to receive ride requests. The coverage increases as soon as the driver is en route to pick up a passenger, and increase again once the pickup is made.
The Progressive policy addresses these distinct periods by providing coverage for all three.