A cable car passes a line of taxicabs in San Francisco. The San Francisco… (Justin Sullivan / Getty…)
SACRAMENTO — Ride-sharing company Lyft is improving its insurance coverage for drivers and passengers after state regulators complained that there could be holes in the coverage that Lyft and its competitors provide.
Critics questioned whether the policy goes far enough to fully protect people involved in accidents.
Lyft announced this week that it's giving drivers the option of getting collision insurance to repair damage to their cars. It's also offering protection against being hit by an uninsured or underinsured driver to its basic, $1-million commercial liability coverage.
The announcement came after insurance trade groups in Sacramento and the state Department of Insurance raised questions about potential gaps in the insurance required of ride-sharing companies by their new regulator, the California Public Utilities Commission.
Lyft spokeswoman Erin Simpson said the newly offered coverages should satisfy the Insurance Department's concerns. She stressed, however, that they only are in force when a Lyft passenger is traveling in the vehicle or the driver has accepted a fare on his or her smartphone and is en route to a pickup.
The Lyft coverage takes effect when damages exceed the limits or are not covered by the driver's personal policy, Simpson said.
Lyft, she said, will continue to work with the insurance industry, regulators and other players to provide support to the fledgling ride-sharing industry.
Insurance industry lobbyists, though, said they are skeptical about whether insurance offered by Lyft and its competitors, Uber and Sidecar, is sufficient to protect the public.
They pointed to the New Year's Eve death of a 6-year-old pedestrian, who was hit by an Uber driver not carrying a passenger, as a cause for concern.
"Personal policies are not going to cover you when you're engaged in a Lyft commercial activity," said Mark Sektnan, president of the Assn. of California Insurance Cos.
Uber has had similar coverage for accidents with uninsured and under-insured drivers since December, spokesman Andrew Noyes said. Although the company doesn't yet carry collision protection, it does have a policy of reimbursing its drivers if their personal insurance denies a claim for damage to the ride-sharing car.
Sidecar said on its website that it does not offer collision coverage. It did not specify whether its policy covers damages caused by uninsured and underinsured drivers.