Transportation Network Company Insurance and Financial Considerations

As a driver for a Transportation Network Company (TNC), you're likely aware of the importance of having adequate insurance coverage. In fact, the Federal Trade Commission requires TNCs to provide a minimum level of insurance coverage to their drivers.

This insurance coverage typically includes liability insurance, which protects you and your passengers in the event of an accident. For example, Uber's insurance policy provides up to $1 million in liability coverage per accident.

To manage your finances as a TNC driver, it's essential to understand the types of insurance coverage you're required to have and how they impact your bottom line.

Insurance requirements for transportation network companies (TNCs) are in place to protect passengers and drivers in the event of an accident. TNCs must maintain minimum financial liability coverage.

A TNC must provide primary commercial motor vehicle liability insurance coverage in the amount of $750,000 for vehicles with a seating capacity of more than 8 passengers, including the driver.

TNC insurance shall provide motor vehicle liability coverage of at least $1 million. This coverage must be primary and cover death, bodily injury, and property damage.

TNC insurance shall provide uninsured motorist coverage and underinsured motorist coverage. The coverage shall apply from the moment a passenger enters a TNC partner vehicle until the passenger exits the vehicle.

A TNC may meet its insurance obligations through a policy obtained by a TNC partner, but the transportation network company must verify that the policy is maintained by the TNC partner and is specifically written to cover the TNC partner’s use of a vehicle in connection with a transportation network company’s digital platform.

Here are the minimum insurance requirements for TNCs:

Insurers may file a TNC Certificate of Insurance (MCS 306) or a Form E* with the DMV to provide proof of insurance. This must be done electronically, by mail, or by fax.

Ride-Sharing Insurance is a crucial aspect of Transportation Network Company (TNC) insurance. Your standard car insurance policy only covers personal use, not business purposes like driving for a rideshare company.

If you've secured car insurance through a local independent insurance agent, you may think that's all the coverage you need. However, this policy is not designed to provide auto insurance coverage when using your car for business purposes.

Driving for a TNC is considered business use, which means your standard policy won't cover you. This can leave you vulnerable to financial losses in the event of an accident or other incident.

To ensure you're properly insured, you'll need to explore additional coverage options specifically designed for TNC drivers.

The insurance industry has a surprisingly neutral stance on ride-sharing services. In fact, they welcome the innovation that transportation network companies (TNCs) have brought to the for-hire ground transportation marketplace.

Numerous state insurance regulators have noted that passengers take a risk when they pay for a ride with an uninsured or underinsured TNC driver. This is because personal auto policies are designed to cover only personal use of a private-passenger vehicle, not commercial use.

The insurance industry is now offering policies that cover drivers using their cars as either private passenger vehicles or as part of a TNC company's operations. This is a growing part of the insurance business.

To ensure proper insurance coverage, TNC drivers need a policy that specifically covers TNC activity. This policy should provide primary liability coverage of at least $50,000 per injured person, $100,000 for all injuries in an accident, and $30,000 for property damage.

Here are some key requirements for TNC insurance policies:

Ride-sharing companies like Uber and Lyft have revolutionized the way we get around, but they've also created a complex insurance landscape. Ride-sharing companies are considered commercial enterprises, which means drivers need commercial insurance coverage to be properly insured.

Personal auto policies are designed to cover private use of a vehicle, not commercial use, and typically exclude "livery services." This means that even if a driver has a personal auto policy, it may not cover them when they're driving for a TNC.

The insurance industry welcomes innovation, but it's essential to understand the differences between personal and commercial insurance policies. Passengers taking a ride with an uninsured or underinsured TNC driver may not be able to recoup damages in the event of an accident.

To be properly insured, TNC drivers need commercial insurance policies that provide higher liability limits and recognize the commercial use of their vehicles. Some insurance companies are now offering policies that cover drivers using their cars as either private passenger vehicles or as part of a TNC company's operations.

Here are the key requirements for TNC insurance:

Regulatory compliance can be achieved if a TNC provides its drivers with 24/7 commercial coverage or the driver secures an appropriate rider or endorsement to their personal auto policy, covering the vehicle's periodic TNC-related use.

A standard personal auto policy will not provide coverage for ride-sharing, so it's essential to understand the gaps in your coverage.

To determine if you have sufficient coverage, prospective drivers should ask the TNC what level of coverage it provides.

There are three distinct periods where a personal auto policy offers no coverage to TNC drivers: when the driver logs into the TNC application but is not matched with a passenger, when the driver has made and accepted a match but the passenger is not yet physically in the vehicle, and when the driver has picked up the passenger and the passenger is occupying the vehicle.

Prospective drivers should contact their own auto insurer to address gaps, if any, in their liability protection.

A TNC can provide its drivers with 24/7 commercial coverage or the driver can secure an appropriate rider or endorsement to their personal auto policy, covering the vehicle's periodic TNC-related use.

To review your coverage, you can check the following periods of non-coverage:

American Business Services has been around long before transportation network companies became a thing. They understand public auto and how transportation network companies operate.

The agency has been in business for a while, with 75+ years of combined experience in the business insurance industry.

They specialize in public auto and have exclusive contracts with some companies that allow them to write at a lower minimum premium than others.

American Business Insurance Services is an independent, family-run business that has invested in other transportation network companies and peer-to-peer businesses. Most of the staff utilize transportation network companies and peer-to-peer apps regularly.

Financial considerations for transportation network company (TNC) insurance are crucial to ensure you're adequately protected in case of accidents or other incidents.

Liability coverage limits can range from $50,000 to $1 million, depending on the TNC's requirements and local regulations.

As a TNC driver, you're required to maintain a certain level of insurance, such as $25,000 in bodily injury liability per person.

Minimum premiums for transportation network companies can be quite steep, ranging from $75,000 to $100,000.

This is a significant upfront cost, but some insurers offer premium eroding endorsements, which means they'll carry over any unused credit to the following year if your business doesn't generate enough premium to meet the minimum within a year.

Working with a broker who specializes in writing insurance for transportation network companies can save you time and money, prevent unnecessary coverages, and ensure you have the necessary ones.

To have a successful transportation network company, you need to have a solid financial foundation. Insurers want to see that you have a lot of money, at least $250,000-$1,000,000 in capital, to cover not just the cost of insurance but also operating expenses, advertising, and promotions.

The minimum premiums for transportation network companies can be steep, ranging from $75,000 to $100,000. This is why insurers are cautious and want to make sure you have enough money to keep your business afloat before you start turning a profit.

Most transportation network companies don't profit until after the first year, so insurers want to see that you have a significant amount of money set aside to cover losses. This is especially true for new companies that are still gaining traction in the market.

Here's a breakdown of the minimum capital requirements that insurers typically look for: