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Insurance Commissioner Encourages Individuals Considering Driving for a Ride-hailing Service to Review Their Car Insurance Policy
 
BISMARCK, N.D. – Following recent announcements made by Lyft and Uber regarding the expansion of services in North Dakota, Insurance Commissioner Jon Godfread today encourages individuals considering driving for a ride-hailing service to review their auto insurance policy.
 
“Many North Dakotans, myself included, are excited to learn that both Lyft and Uber will be expanding their operations in our great state. Individuals considering driving for a ride-hailing service should, however, exercise caution and make absolutely sure their current insurance policy provides coverage to do so.” Godfread said, “I strongly recommend they consult with their licensed insurance agent or a representative of their insurance company before applying with either Lyft or Uber.”
 
On February 23, it was announced that the ride-hailing service, Lyft, will soon be beginning operations in Bismarck as part of a larger expansion effort by the company. The move makes Lyft the first ride-hailing service to begin operations in the capital city. Lyft has also launched operations in Fargo and Grand Forks. Similarly, on March 2, Uber announced that it will begin expanding its service in North Dakota to Grand Forks and Bismarck.  Uber has been in Fargo since 2015.
 
Traditional ride-sharing, also known as carpooling, is covered by most personal auto policies. But ride-hailing, which is transporting passengers for a fee that exceeds the simple sharing of expenses, is excluded in most personal auto policies. Companies like Lyft and Uber are considered to be a transportation network company (TNC). A TNC is an organization that arranges transportation for a fee using a technology platform such as a mobile application (app) or website.  TNCs typically have driver requirements such as minimum age limits, valid driver’s license, and current vehicle registration and insurance.
 
The insurance issues associated with TNC activities arise because TNC drivers use personal cars for commercial activity but do not have commercial auto insurance. Personal auto policies generally exclude this exposure by what is commonly called a “livery exclusion.”
 
If a TNC driver’s personal auto policy has an exclusion for livery or commercial use (most North Dakota policies do), there is likely not insurance coverage for incidents involving death, bodily injury, and property damage that covers all related losses, unless the driver has a “TNC specific” policy or endorsement that allows for coverage when driving for a TNC.
 
“If you, or someone on your policy, is interested in driving for a TNC, such as Lyft or Uber, I strongly recommend you talk with your licensed insurance agent to make sure you have the coverage that is required by North Dakota law. These new services offer new opportunities, but also can create some new issues. Without proper coverage, individuals run the risk of being dropped from their current insurance. I hope individuals who choose to drive for these new companies have a good experience. Part of having a good experience is making sure you have the coverage needed, in the case of an accident,” Godfread said.
 
TNCs create a new option for peer-to-peer transportation. New technologies and business ventures often present risks not previously contemplated by state and local laws. The North Dakota Insurance Department, however, has worked to clearly define the terminology and identify the insurance coverage and limits which are required for TNCs. Visit the North Dakota Insurance Department website at http://www.nd.gov/ndins/uploads/57/FINALforWeb20170314TransportationNetworkCompanyGuidance.pdf for a detailed outline of  the laws and regulations for a North Dakota TNC.

North Dakota Insurance Department
600 E. Boulevard Ave.
Bismarck, ND 58505-0320
Phone 701.328.2440
Toll free 800.247.0560
Fax 701.328.4880

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