Massachusetts OKs USAA’s Rideshare Gap Policy

Massachusetts Gov. Charlie Baker and the Division of Insurance announced on Oct. 19 that the United Services Automobile Association (USAA) has been approved to offer additional “gap protection” coverage to its policyholders who drive their cars for rideshare companies. The additional insurance would cover drivers during the gap periods when their personal auto insurance and the insurance provided by rideshare companies don’t apply, such as when the rideshare app is on but the drivers don’t have a fare.

State officials also invited other insurance companies to submit additional proposals for consideration. USAA is the first insurer to apply to offer such coverage in Massachusetts.

USAA said that beginning Nov. 21, USAA members in Massachusetts would be able to purchase rideshare gap protection for policies effective on or after Jan. 7, 2016.

The approval comes as the Massachusetts legislature hammers out a bill that would regulate rideshare companies. “As we work to develop a regulatory framework to support innovative ridesharing companies, it’s crucial that appropriate coverage is available to protect drivers, passengers and the traveling public,” said Baker.

In April, Baker filed “An Act Establishing Department of Public Utilities Oversight of Transportation Network Companies” with the legislature, which would create a statewide regulatory framework for rideshare companies that includes criminal background checks for drivers and requires $1 million in minimum insurance coverage for drivers, while clarifying existing insurance gaps.

Rideshare companies such as Uber and Lyft provide $1 million surplus line coverage to their drivers from the time a ride is accepted to the pickup and drop-off of a passenger – policies which are accepted by Massachusetts and would be required under Baker’s proposed legislation.

Topics Legislation Massachusetts